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Full text of "North Carolina Register v.9 no. 9 (8/1/1994)"

rBr/v<s\=N/74-34/A.2/NJ67 



ne 



RECEIVED 

AUG 3 1994 

KATHT^TNE R E\1ERETT 
LAW LII?RARY 



NORTH CAROLINA 

REGISTER 



IN THIS ISSUE 



3 



^IN LBGIBUS^ 



EXECUTIVE ORDERS 



IN ADDITION 

Voting Rights Act 



PROPOSED RULES 

Environment, Health, and Natural Resources 

Human Resources 

Insurance 

Justice 

Secretary of State 



LIST OF RULES CODIFIED 



RRC OBJECTIONS 



CONTESTED CASE DECISIONS 



ISSUE DATE: August 1, 1994 



Volume 9 • Issue 9 • Rages 588 - 666 



INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMINISTRATrVE CODE 



NORTH CAROLINA REGISTER 

The North Carolina Register is published twice a month and 
contains information relating to agency, executive, legislative and 
judicial actions required by or affecting Chapter 150B of the General 
Statutes. All proposed administrative rules and notices of public 
hearings filed under G.S. 1 50B-2 1 .2 must be published in the Register. 
The Register will typically comprise approximately fifty pages per 
issue of legal text. 

State law requires that a copy of each issue be provided free of 
charge to each county in the state and to various state officials and 
institutions. 

The North Carolina Register is available by yearly subscription at 
a cost of one hundred and five dollars ($105.00) for 24 issues. 
Individual issues may be purchased for eight dollars ($8.00). 

Requests for subscription to the North Carolina Register should be 
directed to the Office of Administrative Hearings, P. O. Drawer 27447, 
Raleigh, N. C. 27611-7447. 

ADOPTION, AMENDMENT, AND REPEAL OF 
RULES 

The following is a generalized statement of the procedures to be 
followed for an agency to adopt, amend, or repeal a rule. For the 
specific statutory authority , please consult Article 2A of Chapter 150B 
of the General Statutes. 

Any agency intending to adopt, amend, or repeal a rule must fint 
publish notice of the proposed action in the North Carolina Register. 
The notice must include the time and place of the public hearing (or 
instructions on how a member of the public may request a hearing); a 
statement of procedure for public comments; the text of the proposed 
rule or the statement of subject matter; the reason for the proposed 
action; a reference to the statutory authority for the action and the 
proposed effective date. 

Unless a specific statute provides otherwise, at least 15 days must 
elapse following publication of the notice in the North Carolina 
Registerhefore the agency may conduct the public hearing and at least 
30 days must elapse before the agency can take action on the proposed 
rule. An agency may not adopt a rule that differs substantially from the 
proposed form published as part of the public notice, until the adopted 
version has been published in the North Carolina Register for an 
additional 30 day comment period. 

When final action is taken, the promulgating agency must file the 
rule with the Rules Review Commission (RRC). After approval by 
RRC, the adopted rule is filed with the Office of Administrative 
Hearings (OAH). 

A rule or amended rule generally becomes effective 5 business 
days after the rule is filed with the Office of Administrative Hearings 
for publication in the North Carolina Administrative Code (NCAC). 

Proposed action on rules may be withdrawn by the promulgating 
agency at any time before final action is taken by the agency or before 
filing with OAH for publication in the NCAC. 



TEMPORARY RULES 

Under certain emergency conditions, agencies may issue temp 
rary rules. Within 24 hours of submission to OAH, the Codifier 
Rules must review the agency's written statement of findings of ne< 
for the temporary rule pursuant to the provisions in G.S. 150B-21.1. 
the Codifier determines that the findings meet the criteria in G. 
150B-21.1, the rule is entered into the NCAC. If the Codifi 
determines that the findings do not meet the criteria, the rule is retumt 
to the agency. The agency may supplement its findings and resubn 
the temporary rule for an additional review or the agency may respoi 
that it wiU remain with its initial position. The Codifier, thereafter, w 
enter the rule into the NCAC. A temporary rule becomes effecti 
either when the Codifier of Rules enters the rule in the Code or on I 
sixth business day after the agency resubmits the rule without chanj 
The temporary rule is in effect for the period specified in the rule or 1 
days, whichever is less. An agency adopting a temporary rule mi 
begin rule-making procedures on the permanent rule at the same tii 
the temporary rule is filed with the Codifier. 

NORTH CAROLINA ADMINISTRATIVE CODE 

The North Carolina Administrative Code (NCAC) is a compilati* 
and index of the administrative rules of 25 state agencies and 
occupational licensing boards. The NCAC comprises approximate 
15,000 letter size, single spaced pages of material of which appro; 
mately 35% is changed aimually. Compilation and publication of t 
NCAC is mandated by G.S. 150B-21.18. 

The Code is divided into Titles and Chapters. Each state agency 
assigned a separate title which is further broken down by cl 
Title 21 is designated for occupational licensing boards. 

The NCAC is available in two formats. 

(1) Single pages may be obtained at a minimum cost of ^ 
dollars and 50 cents ($2.50) for 10 pages or less, plus fifte 
cents ($0.15) per each additional page. 

(2) The full publication consists of 53 volumes, totaling 
excess of 15,000 pages. It is supplemented monthly w 
replacement pages. A one year subscription to the f 
publication including supplements can be purchased 
seven hundred and fifty doDars ($750.00). Individual v 
umes may also be purchased with supplement service. I 
newal subscriptions for supplements to the initial pubUcati 
are available. 

Requests for pages of rules or volumes of the NCAC should 
directed to the Office of Administrative Hearings. 

CITATION TO THE NORTH CAROLINA 
REGISTER 

The North Carolina Register is cited by volume, issue, pi 
number and date. 1:1 NCR 101-201, April 1, 1986 refers to Vohi 
1 , Issue 1 , pages 101 through 201 of thsNorth Carolina Re gisterissi 
on April!, 1986. 



FOR INFORMATION CONTACT: Office of Administra- 
tive Hearings, ATTN: Rules Division, P.O. Drawer 27447, 
Raleigh, North Carohna 2761 1-7447, (919) 733-2678. 



NORTH 
CAROLINA 
REGISTER 



ISSUE CONTENTS 



I. EXECUTIVE ORDERS 

Executive Orders 54-58 . 



588 




II, IN ADDITION 

Voting Rights Act 



594 



Office of Administrative Hearings 

P. O. Drawer 27447 

Raleigh, North Carolina 27611-7447 

(919) 733-2678 



Julian Mann III, 

Director 
James R. Scarcella Sr., 

Deputy Director 
Molly Masich, 

Director ofAPA Services 



Staff: 

Ruby Creech, 

Publications Coordinator 
Teresa Kilpatrick, 

Editorial Assistant 
Jean Shirley, 

Editorial Assistant 

This publication is printed on permanent, 
acid-free paper in compliance with 
as. 125-11.13. 



in. PROPOSED RULES 

Environment, Health, and 
Natural Resources 

Environmental Management .... 616 
Human Resources 

Medical Assistance 597 

Social Services 595 

Insurance 

Medical Database Commission . . 605 
Justice 

N.C. Alarm Systems Licensing 

Board 614 

Secretary of State 

Securities Division 616 

rV. LIST OF RULES CODIFIED ... 635 
V. RRC OBJECTIONS 643 

VI. CONTESTED CASE DECISIONS 

Index to ALJ Decisions 647 

Text of Selected Decisions 

93 OSP 1607 655 

94 EHR 0035 660 

VII. CUMULATIVE INDEX 664 



NORTH CAROLINA REGISTER 

Publication Schedule 

(April 1994 - January 1995) 



Volume 
and 
Issue 

Number 


Issue 
Date 


Last Day 

for 

Filing 


Last Day 
for Elec- 
tronic 
Filing 


Earliest 

Date for 

Public 

Hearing 

15 days 

from 

notice 


* End of 

Required 

Comment 

Period 

30 days 

from 

notice 


T flst Day 

to Submit 

toRRC 


** EarUest 

EflFective 

Date 


9:1 


04/04/94 


03/11/94 


03/18/94 


04/19/94 


05/04/94 


05/20/94 


07/01/94 


9:2 


04/15/94 


03/24/94 


03/31/94 


05/02/94 


05/16/94 


05/20/94 


07/01/94 


9:3 


05/02/94 


04/11/94 


04/18/94 


05/17/94 


06/01/94 


06/20/94 


08/01/94 


9:4 


05/16/94 


04/25/94 


05/02/94 


05/31/94 


06/15/94 


06/20/94 


08/01/94 


9:5 


06/01/94 


05/10/94 


05/17/94 


06/16/94 


07/01/94 


07/20/94 


09/01/94 


9:6 


06/15/94 


05/24/94 


06/01/94 


06/30/94 


07/15/94 


07/20/94 


09/01/94 


9:7 


07/01/94 


06/10/94 


06/17/94 


07/18/94 


08/01/94 


08/22/94 


10/01/94 


9:8 


07/15/94 


06/23/94 


06/30/94 


08/01/94 


08/15/94 


08/22/94 


10/01/94 


9:9 


08/01/94 


07/11/94 


07/18/94 


08/16/94 


08/31/94 


09/20/94 


11/01/94 


9:10 


08/15/94 


07/25/94 


08/01/94 


08/30/94 


09/14/94 


09/20/94 


11/01/94 


9:11 


09/01/94 


08/11/94 


08/18/94 


09/16/94 


10/03/94 


10/20/94 


12/01/94 


9:12 


09/15/94 


08/24/94 


08/31/94 


09/30/94 


10/17/94 


10/20/94 


12/01/94 


9:13 


10/03/94 


09/12/94 


09/19/94 


10/18/94 


11/02/94 


11/21/94 


01/01/95 


9:14 


10/14/94 


09/23/94 


09/30/94 


10/31/94 


11/14/94 


11/21/94 


01/01/95 


9:15 


11/01/94 


10/11/94 


10/18/94 


11/16/94 


12/01/94 


12/20/94 


02/01/95 


9:16 


11/15/94 


10/24/94 


10/31/94 


11/30/94 


12/15/94 


12/20/94 


02/01/95 


9:17 


12/01/94 


11/07/94 


11/15/94 


12/16/94 


01/03/95 


01/20/95 


03/01/95 


9:18 


12/15/94 


11/22/94 


12/01/94 


12/30/94 


01/17/95 


01/20/95 


03/01/95 


9:19 


01/03/95 


12/08/94 


12/15/94 


01/18/95 


02/02/95 


02/20/95 


04/01/95 


9:20 


01/17/95 


12/21/94 


12/30/94 


02/01/95 


02/16/95 


02/20/95 


04/01/95 



This table is published as a public service, and the computation of time periods are not to be deemed binding 
or controlling. Time is computed according to 26 NCAC 2B .0103 and the Rules of Civil Procedure, Rule 
6. 

* An agency must accept comments for at least 30 days after the proposed text is published or until the date 
of any public hearing, whichever is longer. See G.S. 150B-21. 2(f) for adoption procedures. 
** The "Earliest Effective Date " is computed assuming that the agency follows the publication schedule above, 
that the Rules Review Commission approves the rule at the next calendar month meeting after submission, and 
that RRC delivers the rule to the Codifier of Rules five (5) business days before the 1st business day of the next 
calendar month. 



Revised 03/94 



EXECUTIVE ORDERS 



EXECUTIVE ORDER NO. 54 

TO CREATE THE NORTH CAROLINA 

HEALTH CARE INFORMATION AND 

COMMUNICATIONS ALLL^NCE 

WHEREAS, the provision of high quality health 
care to all residents is a desirable state objective; 

WHEREAS, optimizing the use of health care 
resources is necessary for all residents to receive 
high quality health care at reasonable cost; 

WHEREAS, state government has need of 
detailed, current information on the quantity, 
quality, content, and cost of health care services 
rendered in the State of North Carolina for purpos- 
es of policy development and implementation of 
health care reform; 

WHEREAS, the technology to allow interactive 
and real time exchange of medical information is 
necessary to optimize the use of health care re- 
sources on a continuous basis; 

WHEREAS, the public sector must work with 
the private sector to develop information, telecom- 
munications and telemedicine technologies applica- 
ble to health care in all settings; 

WHEREAS, the development of a statewide 
health care information and telecommunications 
network is the most logical next step in meeting 
these goals; and 

WHEREAS, upon direction by me the Articles of 
Incorporation of the North Carolina Health Care 
Information and Communications Alliance, Inc., a 
North Carolina non-profit corporation, have been 
filed with the Secretary of State of North Carolina 
and the formalities of organization of said corpora- 
tion have been effected; 

NOW, THEREFORE, by the power vested in me 
as Governor by the Constitution and laws of North 
Carolina, IT IS ORDERED: 

Section 1. Establishment 

The North Carolina Health Care Information and 
Communications Alliance, Inc. (the "Alliance") is 
hereby established. 

Section 2. Powers and Duties of the Alliance 

The Alliance shall be operated in the public 
interest exclusively for charitable, scientific and 
educational purposes within the meaning of Section 



501(c)(3) of the Internal Revenue Code (or the 
corresponding provision of any future federal tax 
law), including, without limiting the generality of 
the foregoing, to foster the development and 
implementation of a statewide health care informa- 
tion system for the purpose of improving the 
delivery, quality, accessibility and efficiency of 
health care services in North Carolina by utiliza- 
tion of advanced information, telecommunications, 
and telemedicine technologies. 

Solely for the above purposes, but not by way of 
limitation, the Alliance is empowered: 

A. To research, test, develop and promote 
the optimum application of information, 
telecommunications, and telemedicine 
technologies to health care services in all 
settings; 

B. To effect the on-going development and 
implementation of open architecture, 
interoperable, integrated and interactive 
information systems in health care in all 
settings with fully articulated linkages to 
a statewide health care information net- 
work and with attention to national and 
international health care information 
systems and standards; 

C. To effect the on-going design, develop- 
ment and implementation of distributed 
database management capability on a 
scale necessary to support a wide range 
of applications on the health care infor- 
mation network including, among others, 
clinical, emergency response, administra- 
tive, research and educational applica- 
tions; 

D. To foster development and installation of 
on-line standardized, computerized medi- 
cal record and information systems in 
regional medical centers to enable utiliza- 
tion by remote providers of centralized 
diagnostic, treatment planning, expert 
consultation services, and medical refer- 
ence, resource and traimng materials, 
with interactive question, answer and 
messaging capabilities; 

E. To improve health care information 
systems utilized by participants in com- 
munity-level health care delivery net- 
works comprised, among others, of 
hospitals, clinics, physician and dental 
offices, group practices, emergency 
medical systems, nursing homes, home 
care services, pharmacies, company and 
school medical and wellness programs. 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



588 



EXECUTIVE ORDERS 



social service agencies, medical, nursing 
and health administration schools, and 
telemedicine providers; 

F. To assist small and remote rural hospi- 
tals, clinics, provider groups and other 
health-related organizations in becoming 
an integral part of the statewide health 
care information system; 

G. To provide education and training in, and 
coordination with respect to, the use of 
information, telecommunications, and 
telemedicine technologies by health care 
providers, suppliers, patients, educators 
and public agencies; 

H. To provide to the State of North Carolina 
and the United States federal government 
and other governmental units data and 
analysis for the purpose of health care 
policy development and decision-making; 

I. To provide a mechanism for on-going 

evaluation of hardware and software 
performance, clinical effectiveness and 
administrative efficiency of the statewide 
health care information system and to 
provide a mechanism for feedback, rede- 
sign and upgrade of system capabilities; 

J. To support the adoption and implementa- 

tion of standards for computerized patient 
records and computerized patient histo- 
ries; 

K. To support clinical and health services 
research by providing confidentiality- 
protected patient histories and other 
information databases for use by qualified 
f)ersonnel; 

L. To encourage the development of emerg- 

ing businesses in the medical informa- 
tion, computer science, telecommunica- 
tions, and telemedicine fields in North 
Carolina through research and education; 
and 

M. To exercise all rights and powers con- 
ferred by the laws of North Carolina 
upon nonprofit corporations. 

Section 3. Board of Directors. 



Consistent with the Articles of Incorporation of 
the Alliance, the members of the Board of Direc- 
tors shall represent each of the following classes of 
members: (i) major medical centers; (ii) rural 
health care centers or organizations; (iii) telecom- 
munications and information technology compa- 
nies; (iv) pharmaceutical, clinical trial companies 
and health care applications device development 
and manufacturing companies; (v) other health 



care providers, local public health departments and 
nonprofit organizations; and (vi) persons who 
represent the interests of the State of North Caroli- 
na. The initial directors of the Alliance shall serve 
until their successors are duly elected and qualified 
as set forth in the Articles of Incorporation and 
By-Laws of the Alliance. 

Section 4. Chair of the Board. 

The Governor shall appoint the Chair of the 
Board of Directors of the Alliance to serve until 
the third annual meeting of members of the Alli- 
ance. 

Section 4. Responsibilities o{ the Board of 
Directors in the First Year of Alliance Opera- 
tions. 

The Board of Directors shall complete the fol- 
lowing tasks in the first year of operations: 

A. Review and, if necessary, refine the By- 
laws of the Alliance. 

B. Take such steps as are necessary to apply 
for and receive certification as an Internal 
Revenue Code Section 501(c)(3) non- 
profit corporation; 

C. Identify initiatives to be undertaken im- 
mediately to effect the purposes of the 
Alliance and make arrangements to im- 
plement these initiatives; 

D. Develop and adopt a six-year work plan 
for the Alliance, to be updated as neces- 
sary but no less than every two years; 

E. Develop and adopt a proposal for staffing 
the Alliance; 

F. Develop and adopt an operating budget 
for the Alliance; 

G. Op)en Alliance membership to a range of 
health provider organizations and health 
care information technology corporations, 
each of which, by virtue of its research, 
experience, services and/or products, will 
bring to the Alliance assets and commit- 
ments necessary to achieve the goals of 
the Alliance as delineated in this Order 
and the Alliance's corpxjrate charter; and 

H. Establish the terms for Alliance member- 
ship, a fee schedule for membership 
participation in the Alliance, and other 
funding sources such that the Alliance 
will be self-sustaining and not dependent 
on government financing. 

This Order shall be eflFective immediately and 
shall remain in effect until rescinded. 



589 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



EXECUTIVE ORDERS 



E)one in the Capital City of Raleigh, this 1st day 
of July, 1994. 

EXECUTIVE ORDER NO. 55 

NORTH CAROLINA - HEAD CTART 

COLLABORATION PROJECT 

ADVISORY COUNCIL 

WHEREAS, the State's impoverished children 
will be more effectively assisted if local, state, and 
national service resources and responsibilities are 
shared; and 

WHEREAS, this pooling of resources and re- 
sponsibilities can be better achieved if the various 
service providers for impoverished children have 
a forum for communicating ideas and coordinating 
collaborative projects; 

NOW, THEREFORE, by the authority vested in 
me as Governor by the Constitution and laws of 
North Carolina, IT IS ORDERED: 

Section 1. Establishment. 

The North Carolina ~ Head Start Collaboration 
Project Advisory Council is hereby established. 

Section 2. Membership. 

(a) The following individuals or their designees 
shall serve as members of the Council: 

(1) The Senior Education Advisor in the 
Office of the Governor; 

(2) The Secretary of Human Resources; 

(3) The Secretary of Environment, Health, 
and Natural Resources; 

(4) The Secretary of Commerce; 

(5) The Director of the Division of Family 
Development in the Department of Hu- 
man Resources; 

(6) The Director of the Division of Child 
Development in the Department of Hu- 
man Resources; 

(7) The Director of the Division of Medical 
Assistance in the Department of Human 
Resources; 

(8) The Director of the Division of Mental 
Health, Developmental Disabilities, and 
Substance Abuse Services in the Depart- 
ment of Human Resources; 

(9) The Director of the Division of Social 
Services in the Department of Human 
Resources; 

(10) The Director of the Office of Rural 
Health and Development Services in the 
Department of Human Resources; 



(11) The Director of the Division of Vocation- 
al rehabilitation Services in the Depart- 
ment of Human Resources; and 

(12) A Representative from the North Caroli- 
na Interagency Coordinating Council. 

(b) The following individuals or their designees 
shall be invited to serve as members of the Coun- 
cil: 

(1) The President of the System of Commu- 
nity Colleges; 

(2) The Superintendent of Public Instruction; 

(3) The President of the North Carolina 
Head Start Association; 

(4) The President of the North Carolina 
Partnership for Children, Inc.; and 

(5) The President of the North Carolina 
Community Action Association. 

(c) In addition, nine other members shall be 
named by the Governor, of which at least three 
shall be former Head Start participants or parents. 
Five of these members shall serve an initial term 
of four years. Four of these members shall serve 
an initial term of two years. Thereafter, all terms 
shall be for four years. 

Section 3. Chair. 

The Governor shall designate the chair of the 
Council, who shall serve at his pleasure. 

Section 4. Meetings. 

The Council shall meet at least quarterly at the 
call of the chair. 

Section 5. Purpose. 

The purpose of this Council is to build coopera- 
tion between Head Start and other programs for 
impoverished children to ensure these children the 
fullest possible access to such programs within 
North Carolina. It creates a forum for state 
agencies, Head Start representatives, private 
businesses, and other appropriate organizations to 
develop an understanding among themselves of the 
importance of collaboration among the various 
existing service programs for impoverished chil- 
dren. 

Section 6. Duties. 

Together with the Head Start Coordinator within 
the Department of Human Resources, the Council 
shall: 

(a) Identify possible projects for collabora- 
tion between state and Head Start agen- 
cies; 

(b) Sponsor and advise such collaborative 
ventures; and 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



590 



EXECUTIVE ORDERS 



(c) Serve as an information resource con- 
cerning the goals and objectives of such 
inter-agency collaborative projects. The 
office of the Head Start Coordinator shall 
serve as the central collection and dis- 
semination point for this information. 

Section 7. Administration. 

Administrative support for the Council and its 
subcommittees shall be provided by the Special 
Assistant for Head Start in the Department of 
Human Resources ("DHR"). The U.S. Depart- 
ment of Health and Human Services has provided 
$100,000 for the Council under grant number 90- 
CD-0997, "Head Start in North Carolina: Build- 
ing a Better Partnership." This amount includes 
reimbursement for necessary subsistence and travel 
expenses. 

Section 8. Effect on Other Executive Orders. 

Executive Order Number 186 of the Martin 
Administration is hereby rescinded. 

This Order shall be effective immediately. 

Done in Raleigh, North Carolina, this the 7th 
day of July, 1994. 

EXECUTIVE ORDER NO. 56 

GOVERNOR'S TASK FORCE ON HEALTH 

OBJECnVES FOR THE YEAR 2000 

By the authority vested in me as Governor by the 
Constitution and laws of the State of North Caroli- 
na, FT IS ORDERED: 

Section i. Establishment and Rescission of 
Prior Orders. 

The Governor's Task Force on Health Objectives 
for the Year 2000 ("Governor's Task Force") is 
hereby re-established. The Governor's Task Force 
established herein is the successor organization to 
the one established in Executive Orders 148 and 
176 of the Martin Administration. Those Orders 
are hereby rescinded. 

Section 2. Membership. 

The Governor shall appoint 25 persons including 
a Chair, to serve four year terms. Thereafter, all 
vacancies shall be filled by the Governor. 

The membership shall include representatives 
from the following: 

(a) Department of Human Resources; 

(b) Department of Enviroimient, Health, and 
Natural Resources; 



(c) Association of North Carolina Boards of 
Health; 

(d) North Carolina Hospital Association; 

(e) North Carolina Medical Society; 

(f) North Carolina Academy of Family 
Physicians; 

(g) North Carolina Association of Local 
Health Directors; 

(h) The University of North Carolina School 

of Public Health; 
(i) North Carolina Citizens for Business and 

Industry; 
(j) North Carolina Commission on Indian 

Affairs; 
(k) North Carolina Association of County 

Commissioners; 
(1) NAACP; 

(m) North Carolina Minority Health Council; 
(n) Governor's Council on Physical Fitness 

and Health; 
(o) North Carolina Dental Society; 
(p) North Carolina Nurses' Association; 
(q) Old North State Medical Society; and 
(r) Eight at-large members, including a 

representative of local education. 

Section 3. Functions. 

A. The Governor's Task Force shall meet regu- 
larly at the call of the Chair. 

B. The Governor's Task Force shall provide 
encouragement and guidance to communities 
establishing their own local groups to accomplish 
the objectives developed by the Governor's Task 
Force. 

C. The Governor's Task Force shall have the 
power to designate the Healthy Carolinians 2000 
Task Forces, comprised of representatives of 
public and private organizations which support the 
goals of the Governor's Task Force. They shall 
seek to further the objectives of the Governor's 
Task Force and they shall exist so long as the 
Governor's Task Force does, unless earlier termi- 
nated. 

Section 4. Administration. 

A. Administrative support for the Governor's 
Task Force shall be provided by the Department of 
Enviromnent, Health, and Natural Resources. 
Additional support shall be provided by the De- 
partment of Human Resources. 

B. Members of the Governor's Task Force shall 
be reimbursed for necessary travel and subsistence 
expenses as authorized under General Statutes 138- 
5 and 138-6. Funds for the reimbursement of such 
expenses shall be made available from funds 



591 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



EXECUTIVE ORDERS 



authorized by the Department of Environment, 
Health, and Natural Resources. 

C. It shall be the responsibility of each Cabinet 
department to make every reasonable effort to 
cooperate with the Governor's Task Force in 
carrying out the provisions of this Order. 

This Executive Order shall become effective 
immediately. 

Done in Raleigh, North Carolina, this the 13th 
day of July, 1994. 

EXECUTIVE ORDER NO. 57 
GEORGIA EMERGENCY FLOOD RELIEF 

WHEREAS, on July 7, 1994, the United States 
Department of Transportation declared a regional 
emergency justifying an exemption from 49 
C.ER. 390-399 (Federal Motor Carrier Safety 
Regulations) for a period of thirty days in response 
to the severe flooding in the Georgia area; 

NOW, THEREFORE, pursuant to N.C.G.S. 
166A-6(c), the North Carolina Emergency 
Management Act, by the authority vested in me as 
Governor by the laws and Constitution of the State 
of North Carolina, and with the concurrence of the 
Council of State, IT IS ORDERED: 

Section 1. 

The State of North Carolina, under the 
supervision and direction of its Department of 
Transportation, shall waive weight restrictions on 
the gross weight of vehicles transporting food, 
supplies, and equipment to the victims of the 
severe flooding in the State of Georgia, subject to 
the following conditions: 

(a) vehicle weight shall not exceed the 
maximum gross vehicle weight criteria 
established by the manufecturer or 
90,000 pounds gross vehicle weight, 
whichever is less. 

(b) Tandem axle weights shall not exceed 
50,000 pounds and single axle weights 
shall not exceed 25,000 pounds. 

(c) The vehicles shall, upon entering the 
State of North Carolina, stop at the first 
available vehicle weigh station and 
produce identification sufficient to 
establish that the load contained thereon 
is part of the relief effort for the severe 
flooding in the State of Georgia. 

(d) This Order shall not be in effect on 
bridges posted pursuant to N.C.G.S. 136- 



72. 



Section 2. 

The vehicles described above shall be exempt 
from the vehicle licensing and tax requirements of 
N.C.G.S. 105, Subchapter 5, Article 36B (motor 
fuels tax). 

Section 3. 

As a result of the 7 July 1994 declaration of 
regional emergency by the United States 
Department of Transportation and its 
corresponding exemption from 49 C.F.R. 390-399, 
nonparticipants in North Carolina's International 
Registration Plan shall be permitted to operate in 
North Carolina without penalty under N.C.G.S. 
20-382. 

Section 4. 

If returning vehicles are loaded with some other 
backhaul, all normal weight and permit restrictions 
apply. 

Section 5. 

The North Carolina Department of 
Transportation shall enforce the conditions set 
forth in Sections 1, 2, and 3 in a manner which 
would best accomplish the purposes of this Order 
without endangering motorists on North Carolina 
highways. 

This Order is effective immediately and shall 
remain in effect for thirty days. 

Done in the Capital City of Raleigh, North 
Carolina, this the 14th day of July, 1994. 

EXECUTIVE ORDER NO. 58 

PUBLIC GREENWAYS ACROSS 

STATE LANDS 

WHEREAS, greenways are linear open spaces 
that can provide many benefits to the State's 
environment and growing population; and 

WHEREAS, North Carolina has earned a 
national reputation for greenways because 
approximately forty local governments have begun 
greenway programs under their own initiative; and 

WHEREAS, the environmental and 
socioeconomic benefits of greenways are 
numerous, and have been set out in the North 
Carolina Greenways Advisory Panel Report to the 
Governor; and 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



592 



EXECUTIVE ORDERS 



WHEREAS, existing and potential greenways 
and their related benefits typically cross the 
jurisdictional boundaries of governments; and 

WHEREAS, state support for locally initiated 
greenways is unfocused because responsibility for 
the various functions through which greenway 
benefits arise are distributed among separate 
departments; and 

WHEREAS, there are opportunities to improve 
state government responsiveness to local 
governments in their efforts to develop greenway 
systems for the environmental, socioeconomic, and 
overall quality of life benefits of our citizens; 

NOW, THEREFORE, by the power vested in me 
as Governor by the laws and Constitution of the 
State of North Carolina, IT IS ORDERED: 

Section 1. Policy. 

(a) It shall be the policy of the State to make 
every reasonable effort to anticipate and otherwise 
accommodate local government requests related to 
the development of greenway systems. 

(b) In recognition of the broad and 
comprehensive character of greenway benefits and 
the narrow and specific focus of State government 
programs, it shall be the responsibility of every 
State agency to cooperate between and among 
themselves, to the maximum extent feasible, to 
address the multiple objectives of local greenway 
development. 

(c) To the extent practicable, institutional 
solutions shall be implemented to enhance the 
development of greenway systems, rather than 
resolving issues on a case-by-case basis. 

Section 2. Action. 



The following actions shall be taken as initial 
steps toward realization of the "Public Greenways 
across State Lands" recommendation presented in 
the North Carolina Greenway Advisory Panel's 
Report to the Governor: 
(a) The State Property Office and the 
Department of Transportation shall work 
with local governments to integrate local 
greenways with State lands. 
Every reasonable effort shall be made to 
integrate greenways with State lands in a 
manner that is compatible with the 
function and management of the 
property. 

Severance of greenway corridors is to be 
avoided whenever possible, and the 



(b) 



identification of comparable alternative 
routes is preferred to the exclusion of 
greenways altogether, 
(d) Appropriate easement conditions may be 
negotiated wdth the interested local 
governments to mitigate for the greenway 
corridor and assure adequate maintenance 
and management. 

Section 3. Role of the Department of 
Environment. Health, and Natural Resources. 

(a) The Department of Environment, Health, 
and Natural Resources shall continue the 
leadership role it began with establishment of the 
North Carolina Greenways Advisory Panel 
(NCGAP). 

(b) The Department shall encourage, coordinate 
and monitor progress toward fulfillment of the 
recommendations presented in the NCGAP Report 
to the Governor, and the provisions of this Order. 

(c) The Department shall emphasize the 
development of educational information on 
greenways for use within State programs, and 
through them to local governments and individual 
citizens. 

This Executive Order shall be effective 
immediately. 

Done in the Capital City of Raleigh, North 
Carolina, this the 14th day of July, 1994. 



(c) 



593 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



IN ADDITION 



I his Section contains public notices that are required to be published in the Register or have been 
approved by the Codifier of Rules for publication. 



U.S. Department of Justice 

Civil Rights Division 

DLP:DLK:NG:lss:gmh Voting Section 

DJ 166-012-3 P.O. Box 66128 

94-2134 Washington, DC. 20035-6128 

July 11, 1994 

Z. Creighton Brinson, Esq. 

Taylor, Brinson & Moore 

P. O. Drawer 308 

Tarboro, North Carolina 27886-0308 

Dear Mr. Brinson: 

This refers to the annexations (Ordinance Nos. 92-5, 92-6 and 94-5) and the designation of the 
annexed areas to election districts of the City of Tarboro in Edgecombe County, North Carolina, submitted 
to the Attorney General pursuant to Section 5 of the Voting Rights Act of 1965, as amended, 42 U.S.C. 
1973c. We received your submission on May 10, 1994. 

The Attorney General does not interpose any objection to the specified changes. However, we note 
that Section 5 expressly provides that the failure of the Attorney General to object does not bar subsequent 
litigation to enjoin the enforcement of the changes. See the Procedures for the Administration of Section 5 
(28C.ER. 51.41). 



Sincerely, 

Deval L. Patrick 

Assistant Attorney General 

Civil Rights Division 



By: 



Steven H. Rosenbaum 
Chief, Voting Section 



9:9 NORTH CAROLINA REGISTER August I, 1994 594 



PROPOSED RULES 



TITLE 10 - DEPARTMENfT OF HUMAN RESOURCES 

I\otice is hereby given in accordance with G.S. 150B-21.2 that the Social Services Commission intends to 
amend rules cited as 10 NCAC 35F .0306. 43L .0201, adopt 41 F .0706 and .0812. 

1 he proposed effective date of this action is November 1 , 1994. 

1 he public hearing will be conducted at 10:00 a.m. on September 7, 1994 at the Albemarle Building, Room 
943-2. 325 N. Salisbury Street. Raleigh. NC 27603. 

ixeason for Proposed Action: 

10 NCAC 35F . 0306 - This rule is being amended to correct an inadvertent error in the service cost-sharing 

schedule. 

10 NCAC 41F .0706 & 41F .0812 - These rules are being proposed to better protect the health, safety, and 

well-being of foster children by requiring that crimiruil record checks be conducted on all foster parent 

applicants and by disqualifying applicants who have been convicted of certain crimes from becoming foster 

parents. 

10 NCAC 43L .0201 - To clarify that Adult Placement services are reimbursable under the Social Services 

Block Grant. 

Lyomment Procedures: Comments may be presented in writing anytime before or at the public hearing or 
orally at the hearing. Time limits for oral remarks may be imposed by the Commission Chairman. Any person 
may request copies of these rules by calling or writing to Shamese Ransome. Division of Social Services, 325 
N. Salisbury Street, Raleigh, NC 27603; 919/733-3055. 

CHAPTER 35 - FAlVflLY SERVICES 

SUBCHAPTER 35F - SERVICE COST-SHARING 

SECTION .0300 - SERVICE COST SHARING REQUIREMENTS 

.0306 SERVICE COCT-SHARING SCHEDULE 

(a) The amount of cost-sharing to be requested from clients shall be in accordance with the following cost- 
sharing schedule: 

COST-SHARING SCHEDULE 







Size of Income Unit 




Minimum 

Percentage 

(Percentage of 

Service Cost) 


Monthly 
Estab. Income 


1 
$ 852-970 
971-1,090 
1,091-1,209 
1,210-1,328 
1,329-1,447 
1 ,448-above 


2 
$1,149-1,301 
1,302-1,516 
1,517-1,600 
1,601-1,761 
1,762-1,952 
1 ,953-above 


3 
$1,446-1,648 
1,649-1,850 
1,851-2,053 
2,054-2,255 
2,256-2,458 
2,459-above 


30% 
40% 
50% 
60% 
75% 
100% 


Monthly 


4 

$1,744-1,987 


5 

$2,041-2,326 


6 

$2,339-2,665 


30% 


595 9:9 


NORTH CAROLINA REGISTER 


August 1, 1994 



PROPOSED RULES 



Estab. Income 


1,988-2,231 


2,327-2,612 


2,666-2,992 


40% 




2,232-2,475 


2,613-2,897 


2,993-3,320 


50% 




2,476-2,719 


2,898-3,183 


3,321-3,647 


60% 




2,720-2,963 


3,184-3,469 


3,648-3,975 


75% 




2,964-above 


3,470-above 


3,976-above 


100% 


Monthly 


7 
$2,636-3,004 


8 

$2,934-3,343 


9 
$3,231-3,««83 


30% 


Estab. Income 


3,005-3,373 


3,344-3,754 


3,684-4,135 


40% 




3,374-3,743 


3,755-4,165 


4,136-4,587 


50% 




3,744-4,112 


4,166-4,576 


4,588-5,040 


60% 




4,113-4,481 


4,577-4,986 


5,041-5,492 


75% 




4,482-above 


4,987-above 


5,493-above 


100% 




10 


11 


12 




Monthly 


$3,529-4,022 


$3,826-4,361 


$4,124-4,700 


30% 


Estab. Income 


4,023-4,516 


4,362-4,897 


4,701-5,277 


40% 




4,517-5,010 


4,898-5,432 


5,278-5,856 


50% 




5,011-5,504 


5,433-5,968 


5,857-6,432 


60% 




5,505-5,998 


5,969-6,504 


6,433-7,009 


75% 




5,999-above 


6, 505 -above 


7,010-above 


100% 



Established Income (Estab. Income) as used in this Rule is defined in 10 NCAC 35E .0104, which is 
incorporated by reference, including subsequent amendments and editions; Income Unit as used in this Rule 
is defined in 10 NCAC 35E .0103, which is incorporated by reference, including subsequent amendments and 
editions. Copies of these Rules may be obtained from the Office of Administrative Hearings, Post Office 
Drawer 27447, Raleigh, N.C. 27611-7447, (919) 733-2678, at a cost of two dollars and fifty cents ($2.50) 
for up to ten pages and fifteen cents ($.15) for each additional page at the time of adoption of this Rule. 

(b) Agencies must establish a cost-sharing schedule for clients whose gross monthly income is less than the 
established income as defined in 10 NCAC 35E .0104, which is incorporated by reference, including 
subsequent amendments and editions. Copies of these Rules may be obtained from the Office of 
Administrative Hearings, Post Office Drawer 27447, Raleigh, NC 2761 1-7447, (919) 733-2678, at a cost of 
two dollars and fifty cents ($2.50) for up to 10 pages and fifteen cents ($.15) for each additional page at the 
time of adoption of this Rule. In developing this schedule, agencies may establish percentages of the cost of 
the service or an amount that will be requested from clients. 

(c) Agencies must distribute a copy of the cost-sharing schedule to all clients receiving services subject to 
cost-sharing as defined in Rule .0301 of this Section. The cost-sharing schedule must reflect the income 
ranges and minimum percentages outlined in Paragraph (a) of this Rule. 

(d) Agencies may negotiate higher service cost-sharing percentages or lower service cost-sharing percentages 
than those outlined in Paragraph (a) of this Rule, based on individual client circumstances. The client will 
determine the amount of service cost-sharing he will pay based upon his individual financial circumstances. 



Statutory Authority as. 143B-153. 

CHAPTER 41 - CHILDREN'S 
SERVICES 

SUBCHAPTER 41F - LICENSING 
OF FAMILY FOSTER HOMES 

SECTION .0700 - STANDARDS 
FOR LICENSING 

.0706 CRIMINAL CONVICTIONS 

An applicant shall not be eligible for licensure as 



a foster parent if the applicant, or an^ member of 
the a pplicant's household 14 years or older, has 
been convicted or entered a plea of no contest to 
a crime, and there is a relationship between the 
nature of the crime and the ability of the prospec- 
tive foster parent to assure the health, safety and 
well being of foster children: provided a license 
shall be denied if the applicant or any member of 
the household 14 years or older has been convicted 
or entered a plea of no contest to a felony involv- 
ing violent behavior, unlawful sexual conduct, 
minor children or controlled drugs. 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



596 



PROPOSED RULES 



Statutory Authority G.S. 131D-10.5; 143B-153. 

SECTION .0800 - LICENSING 
REGULATIONS AND PROCEDURES 

.0812 CRIMINAL BACKGROUND 
CHECKS 

The supervising agency shall conduct a criminal 
background investigation through access of the 
Department of Corrections Inmate/Probation 
Inquiry System for all members of the foster 
family household 14 years and older at the time of 
initial application and annually thereafter. The 
results of the criminal background investigation 
shall be reported to the Division of Social Services 
on the application form. 

Statutory Authority G.S. 131D-10.5; 143B-153. 

CHAPTER 43 - SERVICES 
PROGRAM PLAN 

SUBCHAPTER 43L - SOCIAL 
SERVICES BLOCK GRANT 

SECTION .0200 - SERVICES TO BE 
PROVIDED 

.0201 SOCLU. SERVICES BLOCK 
GRANT FUNDED SERVICES 

Services which may be reimbursed with Social 
Services Block Grant Funds are: 

(1) adjustment services for the blind or visu- 
ally impaired; 

(2) adoption services; 

(3) adult developmental activity programs for 
individuals who are substantially mentally 
retarded or severely physically disabled; 

(4) adult placement services; 

(5) f4) before/after school and summer de- 
velopmental day centers for children who 
are mentally retarded; 

(6) f5^ child day care services; 

(7) i4>j chore services for the blind; 

(8) f^ community living services; 

(9) f8) day care services for adults; 

(10) i^ day treatment programs for children 
and adolescents who are emotionally 
disturbed; 

(11) ^W) delinquency prevention services; 

(12) tW-) developmental day centers for pre- 
school children who are mentally retard- 
ed; 

(13) {¥3r) early childhood intervention services 
for children who are mentally retarded or 



at high risk for mental retardation; 

(14) (4-^ employment and training support 
services; 

(15) (44) family planning services; 

(16) iiSj foster care services for adults; 

(17) (i4) foster care services for children; 

(18) (W) health support services; 

(19) f4-8) housing and home improvement 
services; 

(20) fW) individual and family adjustment 
services; 

(21) (30) in-home aide services (levels I 
through IV); 

(22) (^4) nutrition services; 

(23) f33) outpatient services for individuals of 
all disability groups; 

(24) {5^ partial hospitalization services for 
adults and elderly individuals who are 
acutely mentally ill or are substance 
abusers; 

(25) f34) personal and family counseling; 

(26) f35) preparation and delivery of meals; 

(27) f3^ problem pregnancy services; 

(28) i¥fj protective services for adults; 

(29) f3*) protective services for children; 

(30) (39) residential treatment for the emotion- 
ally disturbed; 

(31) f^O) residential treatment programs for 
children and adolescents who are emo- 
tionally disturbed; 

(32) i^^ residential treatment/rehabilitation 
programs for individuals who are alcohol 
or other drug abusers; 

(33) f^ respite care services; 

(34) (^^ social setting and non-hospital medi- 
cal detoxification services for individuals 
who are alcoholics; 

(35) 04) transitional residence programs for 
adult and elderly individuals who are 
mentally ill; 

(36) 0#) transportation services; 

(37) 0^ youth services. 



Statutory Authority 
143B-153. 



G.S 108A-71; 1438-10; 



****************** 

jyiotice is hereby given in accordance with G.S. 
150B-21.2 that the DHR/Division of Medical 
Assistance intends to amend rules cited as 10 
NCAC SOB . 031 1 and . 0403. 



597 



9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



PROPOSED RULES 



The proposed effective date of this action L 
November 1, 1994. 



IS 



Ihe public hearing will be conducted at 1:30 
p.m. on September 1, 1994 at the North Carolina 
Division of Medical Assistance, 1985 Umstead 
Drive, Room 297, Raleigh, NC 27603. 

iXeason for Proposed Action: Rules necessary to 
bring the State into compliance with federal law. 

C^omment Procedures: Written comments con- 
cerning these rules must be submitted by August 
31, 1994, to: Division of Medical Assistance, 
1985 Umstead Drive, Raleigh, NC 27603 ATTN: 
Clarence Ervin, APA Coordinator. Oral comments 
may be presented at the hearing. In addition, a 
fiscal impact statement is available upon written 
request from the same address. 

CHAPTER 50 - MEDICAL ASSISTANCE 

SUBCHAPTER SOB - ELIGIBILITY 
DETERMINATION 

SECTION .0300 - CONDITIONS 
FOR ELIGIBILITY 

.0311 RESERVE 

North Carolina has elected the option under 
Section 1902(f) of the Social Security Act to limit 
Medicaid eligibility for the aged, blind or the 
disabled to individuals who meet eligibility re- 
quirements more restrictive than those under 
Supplemental Security Income. Applicants for and 
recipients of Medicaid shall use their own resourc- 
es to meet their needs for living costs and medical 
care to the extent that such resources can be made 
available. Certain resources shall be protected to 
meet specific needs such as burial and transporta- 
tion and a limited amount of resources shall be 
protected for emergencies. 
(1) The value of resources currently available 
to any budget unit member shall be con- 
sidered in determining financial eligibil- 
ity. A resource shall be considered 
available when it is actually available and 
when the budget unit member has a legal 
interest in the resource and he, or some- 
one acting in his behalf, can take any 
necessary action to make it available, 
(a) Resources shall be excluded in deter- 



mining financial eligibility when the 
budget unit member having a legal 
interest in the resources is incompetent 
unless: 
(i) A guardian of the estate, a general 
guardian or an interim guardian has 
been lawfully appointed and is able to 
act on behalf of his ward in North 
Carolina and in any state in which 
such resources are located; or 
(ii) A durable power of attorney, valid in 
North Carolina and in any state in 
which such resource is located, has 
been granted to a person who is au- 
thorized and able to exercise such 
power. 

(b) When there is a guardian, an interim 
guardian, or a person holding a valid, 
durable power of attorney for a budget 
unit member, but such person is unable, 
foils, or refuses to act promptly to 
make the resources actually available to 
meet the needs of the budget unit mem- 
ber, a referral shall be made to the 
county department of social services of 
a determination of whether the guardian 
or attorney in fact is acting in the best 
interests of the member and if not, 
contact the clerk of court for interven- 
tion. The resources shall be excluded 
in determining financial eligibility 
pending action by the clerk of court. 

(c) When a Medicaid application is filed on 
behalf of an individual who: 

(i) is alleged to be mentally incompetent, 
(ii) has or may have a legal interest in a 
resource that affects the individual's 
eligibility, and 
(iii) does not have a representative with 
legal authority to use or dispose of the 
individual's resources, the individual's 
representative or family member shall 
be instructed to file within 30 calen- 
dar days a judicial proceeding to 
declare the individual incompetent and 
appoint a guardian. If the representa- 
tive or femily member either foils to 
file such a proceeding within 30 
calendar days or fails to timely con- 
clude the proceeding, a referral shall 
be made to the services unit of the 
county department of social services 
for guardianship services. If the 
allegation of incompetence is support- 
ed by a physician's certification or 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



598 



PROPOSED RULES 



other competent evidence from sourc- 
es including but not limited to physi- 
cians, nurses, social workers, psy- 
chologists, relatives, friends or others 
with knowledge of the condition of 
the individual, the resources shall be 
excluded except as provided in Sub- 
items (l)(d) or (e) of this Rule. 

(d) The budget unit member's resources 
shall be counted in determining his 
eligibility for Medicaid beginning the 
first day of the month following the 
month a guardian of the estate, general 
guardian or interim guardian is appoint- 
ed, provided that after the appointment, 
property which cannot be disposed of 
or used except by order of the court 
shall continue to be excluded until 
completion of the applicable procedures 
for disposition specified in Chapters 1 
or 35A of the North Carolina General 
Statutes. 

(e) When the court rules that the budget 
unit member is competent or no ruling 
is made because of the death or recov- 
ery of the member, his resources shall 
be counted except for periods of time 
for which it can be established by com- 
petent evidence from sources including 
but not limited to physicians, nurses, 
social workers, psychologists, relatives, 
friends or others with knowledge of the 
condition of the individual that the 
member was in fact incompetent. Any 
such showing of incompetence is sub- 
ject to rebuttal by competent evidence 
as specified herein and in Sub-item 
(l)(c) of this Rule. 

(2) The limitation of resources held for 
reserve for the budget unit shall be as 
follows: 

(a) For Family and Children's related 
categorically needy cases, one thousand 
dollars ($1,000) per budget unit; 

(b) For aged, blind or disabled cases and 
Family and Children's related medically 
needy cases, one thousand five hundred 
dollars ($1,500) for a budget unit of 
one person, two thousand two hundred 
fifty dollars ($2,250) for a budget unit 
of two persons and increases of one 
hundred dollars ($100.00) for each 
additional person in the budget unit 
over two, not to exceed a total of three 
thousand, fifty dollars ($3,050). 



(3) If the value of countable resources of the 
budget unit exceeds the reserve allowance 
for the unit, the case shall be ineligible: 

(a) For Family and Children's related cases 
and aged, blind or disabled cases pro- 
tected by grandfathered provisions, and 
medically needy cases not protected by 
grandfethered provision, eligibility shall 
begin on the day countable resources 
are reduced to allowable limits or ex- 
cess income is spent down, whichever 
occurs later; 

(b) For categorically needy aged, blind or 
disabled cases not protected by grand- 
fathered provisions, eligibility shall 
begin no earlier than the month count- 
able resources are reduced to allowable 
limits as of the first moment of the first 
day of the month. 

(4) Resources counted in the determination 
of financial eligibility for categorically 
needy and medically needy aid to the 
aged, blind, or disabled cases protected 
by grandfathered provisions are: 

(a) Cash on hand; 

(b) The current balance of savings 
accounts, except savings of a student 
saving his earnings for educational 
purposes; 

(c) The current balance of checking 
accounts; 

(d) Cash value of life insurance policies 
when the total face value of all policies 
that accrue cash value exceeds one 
thousand five hundred dollars ($1,500); 

(e) Equity in motor vehicles, including 
motor homes, determined to be 
non-essential according to Rule .0403 
of this Subchapter; 

(f) Equity in excess of one thousand 
dollars ($1,(XX)) in motor vehicles, 
including motor homes, determined to 
be essential according to Rule .0403 of 
this Subchapter; 

(g) Stocks, bonds, mutual fund shares, 
certificates of deposit and other liquid 
assets; 

(h) Negotiable and salable promissory notes 

and loans; 
(i) Trust funds; 
(j) The portion of lump sum payments 

remaining after the month of receipt; 
(k) Individual Retirement Accounts or other 

retirement accounts or plans; 
(1) Equity in real property not used as the 



599 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



PROPOSED RULES 



homesite or not producing an income; 

(m) Value of burial spaces other than spaces 
designated for the eligible individual, 
the eligible individual's spouse, and the 
eligible individual's immediate family 
which includes the eligible individual's 
minor and adult children, stepchildren, 
and adopted children, brothers, sisters, 
parents, adoptive parents, and the 
spouses of those persons; 

(n) Salable remainder interest in life-estate 
property not used as the budget unit's 
homesite; 

(0) Patient accounts in long term care 
facilities. 

(5) Resources counted in the determination 
of financial eligibility for aid to categori- 
cally needy aged, blind or disabled cases 
not protected by grandfethered provisions 
are: 

(a) Cash on hand; 

(b) The balance of savings accounts, except 
savings of a student saving his earnings 
for educational purposes; 

(c) The balance of savings account, except 
for aged, blind or disabled individuals 
who have a plan for achieving self- 
support (PASS) that is approved by the 
Social Security Administration; 

(d) The balance of checking accounts less 
the current monthly income which had 
been deprosited to meet the budget unit's 
needs when reserve was verified or 
lump sum income from 
self-employment deposited to pay 
annual expenses; 

(e) Cash value of life insurance policies 
when the total face value of all policies 
that accrue cash value exceeds one 
thousand five hundred dollars ($1,500); 

(f) Trust fundst and annuities in 
accordance with 42 USC 1396p(d) and 

Mi 

(g) Stocks, bonds, mutual fund shares, 
certificates of deposit and other liquid 
assets; 

(h) Negotiable and salable promissory notes 

and loans; 
(i) Revocable burial contracts and burial 

trusts; 
(j) The portion of lump sum payments 

remaining after the month of receipt; 
(k) Individual Retirement Accounts or other 

retirement accounts or plans; 

(1) I^tient accounts in long term care fecilities ; 



(m) Equity in motor vehicles determined to 
be non-essential under Rule .0403 of 
this Subchapter or, if no motor vehicle 
is excluded as essential, any equity in 
excess of four thousand five hundred 
dollars ($4,500) in a motor vehicle; 
(n) Equity in real and/or personal property 
when the combined equities is six 
thousand dollars ($6, (XX)) or less and 
the property does not yield a net annual 
income of at least six percent of the 
equities; 
(o) Equity in real and/or personal property 
when the combined equities exceed six 
thousand dollars ($6,000); 
(p) Equity in personal property, subject to 
(5) (m) and (n) of this Rule, is limited 
to: 
(i) Mobile homes not used as homesite, 
(ii) Boats, boat trailers and boat motors, 
(iii) Campers, 

(iv) Farm and business equipment; 
(q) Equity in real property, subject to (5) 
(m) and (n) of this Rule, is limited to: 
(i) Value of burial spaces other than 
spaces designated for the eligible 
individual, the eligible individual's 
spouse, and the eligible individual's 
immediate family which includes the 
eligible individual's minor and adult 
children, stepchildren, and adopted 
children, brothers, sisters, parents, 
adoptive parents, and the spouses of 
those persons; 
(ii) Fee simple interest; 
(iii) Salable remainder interest; 
(iv) Tenancy by the entireties interest 
only. 
(6) Resources counted in the determination 
of financial eligibility for aid to medically 
needy aged, blind or disabled cases not 
protected by grandfethered provisions 
are: 
Cash on hand; 

The balance of savings accounts, except 
savings of a student saving his earnings 
for educational purposes; 
The balance of savings accounts, except 
for aged, blind or disabled individuals 
who have a plan for achieving self- 
support (PASS) that is approved by the 
Social Security Administration; 
(d) The balance of checking accounts less 
the current monthly income which had 
been deposited to meet the budget unit's 



(a) 
(b) 



(c) 



NORTH CAROLINA REGISTER 



August 1, 1994 



600 



PROPOSED RULES 



needs when reserve was verified or 
lump sum income from 
self-employment deposited to pay 
annual expenses; 

(e) Cash value of life insurance policies 
when the total face value of all policies 
that accrue cash value exceeds one 
thousand dollars ($1,000); 

(f) Trust fundst and annuities in 
accordance with 42 USC 1396p(d) and 
lei; 

(g) Stocks, bonds, mutual fund shares, 
certificates of deposit and other liquid 
assets; 

(h) Negotiable and salable promissory notes 

and loans; 
(i) Revocable burial contracts and burial 

trusts; 
(j) The portion of lump sum payments 

remaining after the month of receipt; 
(k) Individual Retirement Accounts or other 

retirement accounts or plans; 
(1) Patient accounts in long term care 

facilities; 
(m) Equity in motor vehicles determined to 
be non-essential under Rule .0403 of 
this Subchapter or, if no motor vehicle 
is excluded as essential, any equity in 
excess of four thousand five hundred 
dollars ($4,500) in a motor vehicle; 
(n) Equity in real property and f>ersonal 
property that does not produce a net 
annual income; 
(o) Equity in personal property, subject to 
(6)(m) of this Rule, is limited to: 
(i) Mobile homes not used as homesite, 
(ii) Boats, boat trailers and boat motors, 
(iii) Campers, 

(iv) Farm and business equipment; 
(p) Equity in real property, subject to Sub- 
item (6)(m) of this Rule, is limited to 
interest in real estate other than that 
used as the budget unit's homesite and 
includes: 
(i) Fee simple interest, 
(ii) Tenancy by the entireties interest 

only, 
(iii) Salable remainder interest, 
(iv) Value of burial spaces other than 
spaces designated for the eligible 
individual, the eligible individual's 
spouse, and the eligible individual's 
immediate family which includes the 
eligible individual's minor and adult 
children, stepchildren, and adopted 



(a) 
(b) 



(c) 



children, brothers, sisters, parents, 

adoptive parents, and the spouses of 

those jjersons. 

(7) Resources counted in the determination 

of financial eligibility for categorically 

needy Family and Children's related 

cases are: 

Cash on hand; 

The balance of savings accounts, 

including savings of a student saving 

his earnings for school expenses; 

The balance of checking accounts less 

the current monthly income which had 

been deposited to meet the budget unit's 

monthly needs when reserve was 

verified; 

The portion of lump sum payments 

remaining after the month of receipt; 

Cash value of life insurance policies 

owned by the budget unit; 

Revocabl e tf»9t Trust funds-j and 

annuities in accordance with 42 USC 

1396p(d) and (e); 

Stocks, bonds, mutual fund shares, 

certificates of deposit and other liquid 

assets; 

Negotiable and salable promissory notes 

and loans; 

Revocable pre-paid burial contracts; 

Patient accounts in long term care 

facilities; 

Individual Retirement Accounts or other 

retirement accounts or plans; 

Equity in non-essential personal 

property limited to: 
Mobile homes not used as home. 
Boats, boat trailers and boat motors. 
Campers, 

Farm and business equipment; 
Equity in excess of one thousand five 
hundred dollars ($1 ,500) in one motor 
vehicle determined to be essential 
under Rule .0403 of this Subchapter; 
Equity in motor vehicles determined 
to be non-essential under Rule .0403 
of this Subchapter; 
(m) Equity in real profjerty is limited to 

interest in real estate other than that 

used as the budget unit's homesite and 

is limited to: 
(i) Fee simple interest, 
(ii) Tenancy by the entireties interest 

only, 
(iii) Salable remainder interest, 
(iv) Value of burial plots. 



(d) 



(e) 



(f) 



(g) 



(h) 

(i) 
0) 

(k) 
0) 



(i) 

(ii) 

(iii) 

(iv) 

(V) 



(vi) 



601 



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PROPOSED RULES 



(a) 
(b) 



(c) 



(8) Resources counted in the determination 
of financial eligibility for medically 
needy Family and Children's related 
cases are: 
Cash on hand; 

The balance of savings accounts, 
including savings of a student saving 
his earnings for school expenses; 
The balance of checking accounts less 
the currently monthly income which 
had been deposited to meet the budget 
unit's monthly needs when reserve was 
verified or lump sum income from 
self-employment deposited to pay 
annual expenses; 

(d) Cash value of life insurance policies 
when the total fece value of all policies 
that accrue cash value exceeds one 
thousand five hundred dollars ($1,500); 

(e) Trust fiinds-; and annuities in 
accordance with 42 USC 1396p(d) and 
Mi 

(f) Stocks, bonds, mutual fund shares, 
certificates of deposit and other liquid 
assets; 

(g) Negotiable and salable promissory notes 
and loans; 

(h) Revocable prepaid burial contracts; 
(i) Patient accounts in long term care 

fecilities; 
(j) Individual Retirement Accounts or other 

retirement accounts or plans; 
(k) Equity in non-essential, non-income 
producing personal property limited to: 
(i) Mobile home not used as home, 
(ii) Boats, boat trailers and boat motors, 
(iii) Campers, 

(iv) Farm and business equipment, 
(v) Equity in motor vehicles determined 
to be non-essential under Rule .0403 
of this Subchapter; 
(1) Equity in real property is limited to 
interest in real estate other than that 
used as the budget unit's homesite and 
is limited to: 
Fee simple interest. 
Tenancy by the entireties interest 
only. 

Salable remainder interest. 
Value of burial plots. 



(i) 
(ii) 

(iii) 
(iv) 



Authority G.S. 108A-54; 108A-55; 108A-58; 42 
U.S.C. 703. 704 1396; 42 CF.R. 435.121; 42 
C.F.R. 435.210; 42 CF.R. 435.711; 42 CF.R. 
435.712; 42 CF.R. 435.734; 42 CF.R. 435.823; 



42 CF.R. 435.840; 42 CF.R. 435.841; 42 CF.R. 
435-845; 42 CF.R. 445.850; 42 CFR. 435.851; 
45 CFR. 233.20; 45 CFR. 233.51; 42 U.S.C. 
1396p(d) and (e). 

SECTION .0400 - BUDGETING 
PRINCIPALS 

.0403 RESERVE 

(a) The value of resources held by the client or 
by a financially responsible person shall be 
considered available to the client in determining 
countable reserve for the budget unit. 

(b) Jointly owned resources shall be counted as 
follows: 

(1) The value of resources owned jointly 
with a non-financially responsible 
person who is a recipient of another 
public assistance budget unit shall be 
divided equally between the budget 
units; 

(2) The value of liquid assets and personal 
property owned jointly with a 
non-financially responsible person who 
is not a client of another public 
assistance budget unit shall be available 
to the budget unit member if he can 
dispose of the resource without the 
consent and participation of the other 
owner or the other owner consents to 
and, if necessary, participates in the 
disposal of the resource; 

(3) The client's share of the value of real 
property owned jointly with a 
non-financially responsible p)erson who 
is not a member of another public 
assistance budget unit shall be available 
to the budget unit member if he can 
dispose of his share of the resource 
without the consent and participation of 
the other owner or the other owner 
consents to and, if necessary, 
participates in the disposal of the 
resource. 

(c) The terms of a separation agreement, divorce 
decree, will, deed or other legally binding 
agreement or legally binding order shall take 
precedence over ownership of resources as stated 
in Paragraphs (a) and (b) of this Rule, except as 
provided in Paragraph (o) of this Rule. 

(d) The reserve limit for the budget unit for 
aged, blind or disabled cases shall be determined 
as follows: 

(1) The reserve limit for two persons shall 
be allowed when spouses live together 



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602 



PROPOSED RULES 



in a private living situation or when the 
couple share the same room in long 
term care; 

(2) Allow the reserve limit for one person 
for the Community Alternative Program 
(CAP) client with a spouse at home and 
only count the resources that are 
available to the CAP client in 
determining his countable reserve; 

(3) The reserve limit for one person is 
allowed for the client who is in long 
term care and the spouse remains in the 
home; 

(4) The reserve allowance for one person is 
allowed for the client who is in long 
term care and the spouse is in 
domiciliary care; 

(5) The reserve limit allowed for a blind or 
disabled minor child who lives with his 
parent or parents or is temporarily 
absent includes the child and the parent 
or parents with whom the child lives; 

(6) The reserve limit allowed for a blind or 
disabled dependent child under age 19 
who is in long term care shall include 
only the child if his care and treatment 
are expected to exceed 12 months, as 
certified by the child's physician. 

(e) Countable resources for Family and 
Children's related cases will be determined as 
follows: 

(1) The resources of a spouse, who is not a 
stepparent, shall be counted in the 
budget unit's reserve allowance if the 
spouses live together or one spouse is 
temporarily absent in long term care 
and the spouse is not a member of 
another public assistance budget unit; 

(2) The resources of a client and a 
financially responsible parent or parents 
shall be counted in the budget unit's 
reserve limit if the parents live together 
or one parent is temporarily absent in 
long term care and the parent is not a 
member of another public assistance 
budget unit; 

(3) The resources of the parent or parents 
shall not be considered if a child under 
age 21 requires care and treatment in a 
medical institution and his physician 
certifies that the care and treatment are 
expected to exceed 12 months. 

(f) The homesite shall be excluded from 
countable resources as follows: 

(1) For all aged, blind or disabled cases 



and family and children's related cases, 
the homesite is the client's principal 
place of residence, which includes the 
house and in the city the lot on which 
the house sits and all the buildings on 
the lot, or in a rural area the land on 
which the house sits, up to one acre, 
and all buildings on the acre, and, for 
all aged, blind, or disabled cases and 
medically needy family and children's 
related cases, the homesite also includes 
up to twelve thousand dollars ($12,000) 
tax value in real property contiguous to 
the principal place of residence, 
regardless of whether the principal 
place of residence is owned by the 
client. 

(2) Additional value in real property 
contiguous to the principal place of 
residence shall be a countable resource. 

(3) The exclusion of the homesite from 
countable resources set forth in 
Subparagraphs (f)(1) and (2) of this 
Rule shall also be applicable for all 
aged, blind, or disabled cases when the 
client is in long term care and his 
spouse, minor children, or adult 
disabled children remain in the home or 
a physician has certified in writing that 
the client will return home within six 
months from the date of entry into the 
hospital or long term care facility. 

(g) For categorically needy aged, blind or 
disabled cases without grandfethered protection, 
nonhome property and personal property that is 
income producing shall be excluded from 
resources when the budget unit's equity in the 
property does not exceed six thousand dollars 
($6,000) and the property produces a net annual 
return of at least six percent of the excludable 
equity value for each income producing activity. 

(h) For medically needy Families and Children 
cases and medically needy aged, blind or disabled 
cases without grandfethered protection, if the client 
or any member of the budget unit has ownership in 
a probated estate, the value of the individual's 
proportionate share of the countable property shall 
be a countable resource unless the property can be 
excluded as the homesite or as income producing 
property, as stated in Paragrp\aphs (e) and (f) of 
this Rule. 

(i) The equity in non-excluded real property 
shall be counted toward the reserve level of the 
budget unit. 

(j) A motor vehicle shall be determined an 



603 



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August I, 1994 



PROPOSED RULES 



essential vehicle as follows: 

(1) For aged, blind or disabled individuals 
with grandfethered protection, if public 
transpjortation cannot be used because it 
is not available or because of his physi- 
cal or mental condition and the vehicle 
is needed to: 

(A) Obtain regular medical treatment, or 

(B) Retain employment, or 

(C) Go shopping if the shopping area is 
more than one-half mile from the 
client's home, or 

(D) Go shopping if the client is responsi- 
ble for shopping and is physically 
limited from walking one-half mile, 
or 

(E) Transport children to and from school 
and the school is not within reason- 
able walking distance; 

(2) For aged, blind or disabled cases with- 
out grandfethered protection and medi- 
cally needy Family and Children's 
related cases, a vehicle must be special- 
ly equipped for use by a handicapped 
individual, used to obtain regular medi- 
cal treatment, or used to retain employ- 
ment. 

(k) The value of non-excluded motor vehicles is 
the Current Market Value, less encumbrances. If 
the applicant/recipient disagrees with the assigned 
value, he has the right to rebut the value. 

(1) The current market value of a remainder 
interest in life estate shall be determined by apply- 
ing the remainder interest p)ercentage from the 
chart in the Medicaid Eligibility Manual to the tax 
value of the property. A lower current market 
value for remainder interest may be established by 
offering the interest for sale and the highest offer 
received, if any, is less than the value determined 
by application of the values chart to the tax value. 

(m) For all aged, blind or disabled cases, up to 
one thousand five hundred dollars ($1,500) may be 
excluded from countable resources for the client 
and his spouse under the burial exclusion. Apply 
the one thousand five hundred dollar ($1,500) 
burial exclusion for each individual separately. 
Only the following resources may be excluded and 
they must be excluded in the following order: 

(1) Irrevocable pre-need burial contracts, 
burial trusts, or other irrevocable ar- 
rangements established for burial ex- 
penses; 

(2) Face value of life insurance policies 
that accrue cash value when the total 
face value of all policies for the budget 



unit is one thousand five hundred dol- 
lars ($ 1 ,500) or less and the cash value 
was not counted in reserve; 

(3) Revocable burial contracts or trusts 
established for burial expenses. Any 
excess remains a countable resource; 

(4) Cash value of life insurance that has 
been designated for burial expenses if 
the cash value was considered in deter- 
mining countable reserve. Any cash 
value in excess of one thousand five 
hundred dollars ($1,500) remains a 
countable resource. 

{a) — For all aged, blind or di s abled coacs and 
medically needy Family — and — Children' s — related 
oases, the value of trust funds established for the 
client or for any member of the budget unit is — a 
countable resource unless it is determined by the 
courts that the fund s arc not available for the 
beneficiary of the trust. 

(e)in) For a married individual: 

(1) Resources available to the individual 
are available to his or her spouse who 
is a noninstitutionalized applicant or 
recipient and who is either living with 
the individual or temporarily absent 
from the home, irrespective of the 
terms of any will, deed, contract, ante- 
nuptial agreement, or other agreement, 
and irrespective of whether or not the 
individual actually contributed the 
resources to the applicant or recipient. 
All resources available to an applicant 
or recipient under these rules must be 
considered when determining his or her 
countable reserve. 

(2) For an institutionalized spouse as de- 
fined in 42 U.S.C. 1396r-5(h), avail- 
able resources shall be determined in 
accordance with 42 U.S.C. 1396r-5(c), 
except as specified in Paragraph (p) of 
this Rule. 

^(o) For an institutionalized individual, the 
availability of resources are determined in accor- 
dance with 42 U.S.C. 1396r-5. Resources of the 
community spouse are not counted for the institu- 
tionalized spouse when: 

(1) Resources of the community spouse 
cannot be determined or cannot be 
made available to the institutionalized 
spouse because the community spouse 
cannot be located; or 

(2) The couple has been continuously sepa- 
rated for 12 months at the time the 
institutionalized spouse enters the insti- 



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August 1, 1994 



604 



PROPOSED RULES 



tution. 

Authority G.S. 108A-54; 108A-55; 143-127. 1(d); 
S.L. 1983, c. 1116; 42 U.S.C. 1396r-5; 42 U.S.C. 
1396a(a)(17); 42 U.S.C. 1396a(a)(51); 42 C.F.R. 
435.602; 42 C.F.R. 435.711; 42 C.F.R. 435.712; 
42 C.FR. 435.723; 42 C.FR. 435.734; 42 CFR. 
435.821; 42 C.FR 435.822; 42 C.FR. 435.823; 
42 C.FR. 435.845; 45 C.FR. 233.20; 45 C.FR. 
233.51; Deficit Reduction Act of 1984 (P.L. 
98-369). Section 2373; Correll v. DSS/DMA/DHR, 
No. 406PA91 (North Carolina Supreme Court); 
Schweiker v. Gray Panthers, 453 U.S. 34. 101 
S. a. 2633, 69 L. Ed. 2d 460 (1981). 

TITLE 11 - DEPARTMENT OF 
INSURANCE 

jyiotice is hereby given in accordance with G.S. 
150B-21.2 that the N.C. Medical Database Com- 
mission intends to amend rules cited as 1 1 NCAC 
15 .0001 - .0002, .0004 - .0010, and .0012. 

1 he proposed effective date of this action is 
November 1, 1994. 

1 he public hearing will be conducted at 2:00 
p.m. on August 25, 1994 at the Medical Database 
Commission, Conference Room, 112 Cox Avenue, 
Raleigh, NC 27605. 

MXeason for Proposed Action; lb establish mone- 
tary penalty guidelines for failure to comply with 
rules, and to clarify definitions. 

i^omment Procedures: Written comments may be 
sent to Jim Hazelrigs at 112 Cox Ave., Raleigh, 
N. C. 27605. Oral presentations may be made at 
the public hearing. Anyone having questions 
should call Jim Hazelrigs at (919) 733-7141. 

CHAPTER 15 - MEDICAL 
DATABASE COMMISSION 

.0001 SCOPE AND PURPOSE 

1 1 NCAC 1 5 sets forth the requirements that 
health care providers defined in 11 NCAC 15 
.0002 must meet in submitting to the Medical 
Database Commission a uniform data set describ- 
ing the case mix of its patients and the charges for 
services provided to these patients. That data will 
be used for grouping health care providers and 



patients, comparing data provider hospital charges 
and utilization, and disseminating information to 
researchers and others as indicated in G.S. 
131 E-2 1 0(b) . Eventually the information base will 
include data on different types of health care 
services, including ambulatory care services and 
long term care services. The Commission may 
collect health care data from physicians, nursing 
homes, ambulatory surgical centers, and other 
types of health care providers. 

Statutory Authority G.S 131E-212(b). 

.0002 DEFINITIONS 

As used in this Chapter, unless specifically stated 
otherwise, the following words have the following 
meanings: 

(1) Act. The North Carolina Medical 
Database Commission Act, G.S. 
131E-210 through 213. 

(2) Aggregate data. A grouping or 
categorization of the raw data such that 
the unit of observation is something other 
than an individual discharge. Reports of 
aggregate data with small cell counts will 
be edited to prevent potential 
identification of individual patients. 

(3) Ambulatory surgery billing form. Either 
the HCFA 1450 UB 8 2 or HCFA 1500 
claim form required by the payor of 
services for ambulatory surgical services 
billing. 

(4) Ambulatory surgical case. An individual 
who receives one or more ambulatory 
surgical procedures in either a dedicated 
ambulatory surgical operating room or in 
an operating room that is used for both 
inpatient and ambulatory surgical 
procedures during a single operative 
encounter. 

(5) Ambulatory surgical facility. As defined 
in G.S. 131E-176(1) means a facility 
designed for the provision of any 
ambulatory surgical program. An 
ambulatory surgical facility serves 
patients who require local, regional or 
general anesthesia, and a period of post- 
operative observation. An ambulatory 
surgical facility may only admit patients 
for a period of less than 24 hours and 
must provide at least one designated 
operating room and at least one 
designated recovery room, have available 
the necessary equipment and trained 
personnel to handle emergencies, provide 



605 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



PROPOSED RULES 



adequate quality assurance and 
assessment by an evaluation and review 
committee. and maintain adequate 
medical records for each patient. An 
ambulatory surgical facility may be 
operated as a part of a physician or 
dentist's office, provided the facility is 
licensed under G.S. 13 IE. Article 6^ Part 
D, but the performance of incidental, 
limited ambulatory surgical procedures 
which do not constitute an ambulatory 
surgical program as defined G.S. 131E- 
176 subdivision (la) and which are 
performed in a physician's or dentist's 
office does not make that office an 
ambulatory surgical facility . 

(6) Ambulatory surgical program. As 
defined in G.S. 131E-176(la) means a 
formal program for providing on a same- 
day basis those surgical procedures which 
require local, regional or general 
anesthesia and a period of post-operative 
observation to patients whose admission 
for more than 24 hours is determined, 
prior to surgery, to be medically 
unnecessary . 

(7) Ambulatory surgical services. Those 
surgical services provided to patients as 
part of an ambulatory surgical program 
within a licensed ambulatory surgical 
facility or a general acute care hospital 
licensed under G.S. 131E, Article 5, Part 
A. 

(8) Case mix data. Case specific discharge 
dafa which describe socio-demographic 
characteristics of the patient; total and 
component charges; principal and other 
diagnoses; treatment and services 
provided to the patient; as well as 
duration and status of the patient's stay in 
the hospital. Case mix data refers to the 
actual data elements abstracted from the 
HCFA 1450 UB 8 2 claim form as well as 
classifications resulting from groupings of 
specific data elements, e.g., DRG 
category. 

(9) Cases ; episodes of treatment of patients 
regardless of the physical setting. 
Includes but is not limited to hospital 
inpatient discharges, and outpatient 
encounters. Usually identifiable because 
of the creation of a claim form (such as 
HCFA 1450 and HCR\ 1500) which 
identifies the date of treatment, the 
diagnosis treated and the procedures 



performed. 

(10) (9) Charge data. Charge data shall 
consist of the HCFA 1450 UB 8 2 data 
elements and codes specified in 11 
NCAC 15 .0005. 

(a) Hospital inpatient rep)orting will consist 
of HCFA 1450 UB 8 2 data elements 
and codes; and 

(b) Hospital ambulatory surgical programs 
and ambulatory surgical facilities 
reporting cases of ambulatory/outpatient 
surgery will consist of either or both 
the HCFA 1450 UB 8 2 or HCFA 1500 
data elements and codes. 

(11) f+0) Commission. The Medical Database 
Commission established under G.S. 
I31E-21I. 

(12) fH^ Compilations. The arrangement of 
data collected by and furnished to the 
Commission by any corporation, 
association, or entity acting under 
agreement with the Commission for 
release and dissemination to the public. 

(13) fi5) Data Provider. The legal entity 
responsible for submitting data to the 
Commission as specified in this Chapter 
and for which the administrative rules 
currently apply. These Rules currently 
a pply to the following: Hospitals and 
Ambulatory surgical facilities . 

(14) {\i) Dataset. The full collection of the 
data submitted by each data provider for 
a particular reporting period in the 
possession of the Commission or the 
contractor designated by the Commission 
to collect and process the data. 

(15) fi4) Executive Director. The chief 
operating officer of the Commission. 

(16) ^ HCFA. The Health Care Financing 
Administration of the U.S. Department of 
Health and Human Services, or any 
successor agency. 

(IT) {\€) Health Care Provider. Any f)erson, 
organization, or entity that renders health 
care services, e.g., hospital, as defined in 
II NCAC 15 .0002. 

(18) {¥f) Hospital. Any facility licensed by 
the North Carolina Division of Facility 
Services under G.S. 131E-77 (Hospital 
Licensure Act) or under G.S. 122C-23 
(Licensure of Facilities for the Mentally 
111, the Mentally Retarded and Substance 
Abusers), but does not include: 
(a) a facility with all of its beds designated 
for medical type "LTC" Gong term 



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606 



PROPOSED RULES 



care) ; 

(b) a facility with the majority of its beds 
designated for medical type "PSY-3" 
(mental retardation); or 

(c) a fecility operated by the North 
Carolina Department of Corrections. 

(19) {W, Billing Forms. 

(a) Uniform billing hospital billing form. 
Form UB-8S/HCFA-1450 £and its 
variations UB 82 and UB 92}, the 
hospital billing form develop>ed by the 
National Uniform Billing Committee or 
its successor. 

(b) Ambulatory surgery billing form. 
Either the HCFA 1450 UB 82 or 
HCFA 1500 form required by the payor 
of services for ambulatory surgical 
services billing. 

(20) ^4^ Raw data. Patient specific records 
including those which have been stripped 
of all patient identifying information. 

(21) <^0) Reporting facility. Any of the hos- 
pitals, ambulatory surgical facilities, 
nursing homes, physicians, or other 
health care providers from which collec- 
tion of information is authorized in 1 1 
NCAC 15 .0001 and for which adminis- 
trative rules are published and currently 
apply. 

Statutory Authority G.S. 131E-212(b). 

.0004 UNIFORM BILLING FORiM 

(a) All hospitals shall complete the uniform 
hospital billing form for every inpatient discharged 
after June 30, 1987, from any bed other than one 
designated medical type "LTC" regardless of the 
source of payment. For patients discharged after 
June 30, 1987 who were admitted prior to July 1, 
1987, hospitals shall submit to the Commission 
either an admit-through-discharge claim or the 
complete set of interim claims necessary to reflect 
the total length of stay and charges. 

(b) The information submitted to the Commis- 
sion shall be reported only for the primary payer, 
including Medicare, Medicaid, other government 
programs, private insurance, health maintenance 
organizations, self-insured, private pay patients, 
and others. Claims for secondary payers will be 
considered duplicate information and should not be 
submitted to the Commission. 

(c) Unless otherwise indicated in this Chapter, 
completion of the uniform hospital billing form for 
inpatient cases shall be in accordance with the 
instructions and definitions in the manual devel- 



oped by the National Uniform Billing Committee 
as adopted and finalized by the North Carolina 
Uniform Billing Committee. A copy of the manu- 
al is available for reference by contacting the 
Executive Director at 112 Cox Avenue, Suite 208, 
Raleigh, North Carolina 27605. 

(d) All hospital ambulatory surgical programs 
and all ambulatory surgical fecilities shall complete 
either the HCFA 1450 UB 8 2 or the HCFA 1500 
form for every ambulatory surgical patient "re- 
leased" from care after September 30, 1993. The 
choice of form will be dictated by the requirements 
of the payor for whom the bill is prepared for the 
case involved, however, the HCFA 1500 1450 
form will be prepared in cases where the payor has 
not stipulated which billing form to use. 

(e) The HCFA 1450 UB 82 and the HCFA 1500 
forms will be completed in accordance with the 
instructions and definitions issued by the Commis- 
sion. A copy of these instructions is available for 
reference by contacting the Executive Director at 
112 Cox Avenue, Suite 208, Raleigh, North 
Carolina, 27605. 

Statutory Authority G.S. 131E-212(b). 

,0005 DESCRIPTION OF DATA TO BE 
SUBMITTED 

(a) In accordance with all pertinent state and 
federal regulations on patient confidentiality, the 
following HCFA 1450 UB 8 2 data elements must 
be submitted to the Commission for every inpatient 
discharged regardless of payer: 

DATA ELEMENT DESCRIPTION 

(1) Patient Control Number Form locator 3 
- As stated in the North Carolina 
HCFA 1450 UB 8 2 Manual. 

(2) Bill Type Form locator 4 - As stated in 
the North Carolina HCFA 1450 UB 8 2 
Manual . 

(3) Provider Identification: 

(A) Medicaid Base Provider Number 
Form locator 8 - The number as- 
signed to the provider by Medicaid or 
as assigned by the Commission (for 
batching only) . 

(B) Federal Tax Number Form Locator 5 
; As stated in the North Carolina 
HCFA 1450 Manual. 

(4) Zip Code of Patient Address Form 
locator 44 13 - Only the zip code por- 
tion of this field is required. Code as 
stated in the North Carolina HCFA 
1450 UB 82 Manual. 

(5) Patient Birth Date Form locator 45 H 



607 



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PROPOSED RULES 



- As stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(6) Patient Sex Form locator 4^ 15 - As 
stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(7) Admission Date Form locator +5 j_7 - 
As stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(8) Admission Type Form locator ^ 19 - 
As stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(9) Source of Admission Form locator +8 
20 - As stated in the North Carolina 
HCFA 1450 UB 8 2 Manual. 

(10) Patient Status Form locator ^ 22 - As 
stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(11) Discharge Date (Covers Period) (State- 
ment Form locator S3 6 - As stated in 
the North Carolina HCFA 1450 UB 8 2 
Manual. 

(12) All Revenue Codes and Associated 
Charges 

Form locators 51 and 53 42 and 47 - 
As stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(13) Payer Identification Form locator #7A 
50a - Classification code and specific 
carrier identification code for primary 
payer. 

(14) Certificate/ Social Security/Health Insur- 
ance Claim/Identification Number Form 
locator €S 60a - As stated in the North 
Carolina HCFA 1450 UB 8 2 Manual. 

(15) Insurance Group Number Form locator 
70 62a - As stated in the North Caroli- 
na HCFA 1450 UB 82 Manual. 

(16) Principal Diagnosis Form locator 77 67 

- As stated in the North Carolina 
HCFA 1450 UB 8 2 Manual. 

(17) Other Diagnoses ; 8 ( 4 others maxi 
mum) Form locators 7 8 8 1 68-75 - As 
stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(18) External Cause of Injury Code (E-Code 
Form Locator 77 ; As stated in the 
North Carolina HCFA 1450 Manual/ 
whenever the principal diagnosis is an 
injury, poisoning or adverse effect. 

(19) {i%^ Principal Procedure and Date 
Form locator 84 80 - As stated in the 
North Carolina HCFA 1450 UB 8 2 
Manual. 

(20) ^W) Other Procedures and Dates Form 
locators 8 5 & 8 6 81a - e - As stated in 



the North Carolina HCFA 1450 UB-83 
Manual. 

(21) ^30) Attending Physician Identification 
Form locator 93 82 - Only the State 
lioonso number of this field UPIN is 
required. Code as stated in the North 
Carolina HCFA 1450 UB 8 2 Manual. 

(22) f3I^ Other Physician Identification 
Form locator 93 83 - Only the State 
licen s e number of thia field UPIN is 
required. Code as stated in the North 
Carolina HCFA 1450 UB 8 2 Manual. 

(b) In accordance with all pertinent State and 
federal laws or regulations on patient confidentiali- 
ty, the following HCFA 1450 UB 8 2 data elements 
must be submitted to the Commission for every 
ambulatory surgical patient released regardless of 
payor: 

DATA ELEMENT DESCRIPTION 

(1) Patient Control Number Form locator 3 
- As stated in the North Carolina 
HCFA 1450 UB-«3 Manual. 



(2) 



(3) 



£A1 



mi 



Bill Typ)e Form locator 4 - As stated in 

the North Carolina HCFA 1450 UB 82 

Manual. 

Provider Identification: 
Medicaid Base Provider Number 
Form locator 8 - The number as- 
signed to the provider by Medicaid or 
as assigned by the Commission (for 
batching only) . 

Federal Tax Number Form Locator 5 
; As stated in the North Carolina 
HCFA 1450 Manual. 



(4) Zip Code of Patient Address Form 
locator 44 n - Only the zip code por- 
tion of this field is required. Code as 
stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(5) Patient Birth Date Form locator 43 JJ 
- As stated in the North Carolina 
HCFA 1450 UB-83 Manual. 

(6) Patient Sex Form locator 4^ 15 - As 
stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(7) Admission DateForm locator 45 17 - 
As stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(8) Admission Type Form locator 47 19 - 
As stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(9) Source of Admission Form locator 48 
20 - As stated in the North Carolina 
HCFA 1450 UB 8 2 Manual. 

(10) Patient Status Form locator 34 22 - As 



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608 



PROPOSED RULES 



stated in the North Carolina HCFA 1450 
UB 8 2 Manual. 

(11) Discharge Date (System Covers Period) 
Form locator S3 6 - As stated in the 
North Carolina HCFA 1450 yB-«3 
Manual. 

(12) All Revenue Codes and Associated 
Charges Form locators 51 and 53 42 
and 47 - As stated in the North Caroli- 
na HCFA 1450 UB 8 2 Manual. 

(13) Payer Identification Form locator 5^ 
50a - Classification code and specific 
carrier identification. 

(14) Certificate/ Social Security/Health Insur- 
ance Claim/Identification Number Form 
locator 68 60a - As stated in the North 
Carolina HCFA 1450 UB 8 2 Manual. 

(15) Insurance Group NumberForm locator 
70 62a - As stated in the North Caroli- 
na HCFA 1450 UB 82 Manual. 

(16) Principal Diagnosis Form locator ^ 67 
- As stated in the North Carolina 
HCFA 1450 UB 82 Manual. 

(17) Other Diagnoses ; 8 ( 4 others maxi 
mum) Form locators 7 8 8 1 68-75 - As 
stated in the North Carolina HCFA 
1450 UB 8 2 Manual. 

(18) External Cause of Injury Code (E- 
Code) Form Locator 77 ; As stated in 
the North Carolina HCFA 1450 Manu- 
al/whenever the principal diagnosis is 
an injury, poisoning or adverse efl'ect. 

(19) fl-8) Principal Procedure and Date 
Form locator 84 80 - As stated in the 
North Carolina HCFA 1450 UB 8 2 
Manual. 

(20) (W) Other Procedures Form locators S5 
&-86 8ia I e - As stated in the North 
Carolina HCFA 1450 UB 82 Manual. 

(21) (30) Attending Physician Form locator 
93 82 - Only the State Identification 
number — license UPIN is required. 
Code as stated regardless of payer. 

(22) fSi^ Other Physician Identification 
Form locator 93 83 - Only the State 
number of this field UPIN is required. 
Code as stated in the North Carolina 
HCFA 1450 UB 8 2 Manual. 

(c) In accordance with all pertinent State and 
federal laws or regulations on patient confidentiali- 
ty, the following HCFA 1500 data elements must 
be submitted to the Commission for every ambula- 
tory surgical patient released. 

DATA ELEMENT DESCRIPTION 

(1) Payer Identification 



Form locator 1 - as stated in the Com- 
mission issued ambulatory surgery data 
submission manual. 

(2) Insured's ID Number Form locator la 

- as stated in the Commission issued 
ambulatory surgery data submission 
manual. 

(3) Patient's Date of Birth Form locator 3 

- as stated in the Commission issued 
ambulatory surgery data submission 
manual. 

(4) Sex Form locator 3 - as stated in the 
Commission issued ambulatory surgery 
data submission manual. 

(5) Zip code of Patient Address Form 
locator 5 - only the zip code is required 
as stated in the Commission issued 
ambulatory surgery data submission 
manual. 

(6) Diagnosis or Nature of Illness or Injury 
Form locator 21 - using the ICD-9-CM 
code and stated in the Commission 
issued ambulatory surgery data submis- 
sion manual. 

(7) Dates of Service Form locator 24A - as 
stated in the Commission issued ambu- 
latory surgery data submission manual. 

(8) Place of Service Form locator 24B - as 
stated in the Commission issued ambu- 
latory surgery data submission manual. 

(9) Type of Service Form locator 24C - as 
stated in the Commission issued ambu- 
latory surgery data submission manual. 

(10) Procedures, Services, Supplies Form 
locator 24D - as stated in the Commis- 
sion issuedambulatory surgery data 
submission manual. 

{4-t) Diagnosis Code Form locator 2 4 E — as 

stated in the Commission issued ambu 



an 

(12) 
(13) 
(14) 



data s ubmission manual. 



latory surgery 
fi3) Charges Form locator 24F - as 
stated in the Commission issued ambu- 
latory surgery data submission manual. 
{^ Days or Units Form locator 24G - 
as stated in the Commission issued 
ambulatory surgery data submission 
manual . 

fW) Federal Tax ID Form locator 25 - 
as stated in the Commission issued 
ambulatory surgery data submission 
manual. 

f4-^ Patient's Account No. Form loca- 
tor 26 - as stated in the Commission is- 
sued ambulatory surgery data submis- 
sion manual. 



609 



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PROPOSED RULES 



(15) f4^ Total Charge Form locator 28 - as 
stated in the Commission issued ambu- 
latory surgery data submission manual. 

(16) fi^ Attending Physician's WN UPIN 
Number Form locator H 17A - as 
stated in the Commission issued ambu- 
latory surgery data submission manual. 

(d) Any hospital or ambulatory surgical facility 
which does not have a Medicaid Base provider 
number shall contact the Commission for assign- 
ment of an identification number. This number 
shall be used in the Medicaid Provider Number 
field for all UB 8 2 rcoorda submitted to the Com 
mi s sion for batching purposes only . 

Statutory Authority as. 131E-212(b). 

.0006 DATA SUBMISSION 

(a) Data Submission Requirements: 

(1) At a minimum, ho s pitals and ambulato 
ry surgical fhoilitioa data providers shall 
submit the required data within 45 
calendar days following the close of the 
calendar quarter during which the pa- 
tient was discharged or died; therefore, 
data for the calendar quarters ending 
March 3 1 , June 30, September 30, and 
December 31 shall be submitted on or 
before May 15, August 14, November 
14, and February 14, respectively. 
However, ho s pital s data providers may 
submit data more frequently during the 
calendar quarter in which the patient 
was discharged or died. 

(2) Upon receipt of a written request for an 
extension from the data provider, the 
Commission may, for good cause, 
extend the time for submitting data for 
a particular reporting period. 

(b) Format for Data Submission: 

(1) All hospitals and ambulatory s urgical 
fiioilitio s data providers may submit 
HCFA 1450 UB 8 2 and HCFA 1500 
(ambulatory surgery only), discharge 
data to the Commission on one of three 
acceptable types of media: on paper 
HCFA 1450 UB 8 2 forms, and HCFA 
1500 forms (ambulatory surgery only), 
on a magnetic tape, or on a personal 
computer (PC) diskette. Other types of 
media used to submit the required data, 
such as on-line transmission, must be 
approved by the Commission. 

(2) On and after July 1 , 1 99 1 , each hospital 
with 1,000 or more annual discharges 



(3) 



(4) 



or cases, as reported on the most cur- 
rent hospital licensure application, must 
submit the required HCFA 1450 UB 8 2 
inpatient discharge data on one of the 
acceptable electronic media specified m 
this Rule and in the format as required 
by the Commission. By Ae end of six 
months after first reporting to the Com- 
mission, any data provider with 1.000 
or more annual discharges or reportable 
cases, as reported on the most current 
Licensure a pplication, will submit the 
required data on one of the acceptable 
electronic media specified in this Rule 
and in the format as required by the 
Commission. An exemption will be 
considered by the Commission if the 
hospital data provider's can demonstrate 
that it lacks the technical capability and 
computer resources to produce the 
required data electronically. The re- 
quest for exemption must be made in 
writing by the ho s pital' s data provider's 
chief executive officer. Each ho s pital 
data provider granted an exemption 
must submit an annual certification 
signed by the ho s pital' s data provider's 
chief executive officer verifying that the 
hospital data provider continues to meet 
the exemption criteria. The annual 
certification form received from the 
Commission must be returned to the 
Commission no later than July 1 of 
each year. 

The physical specifications of the mag- 
netic tape shall be any size reel, record- 
ed in nine track. Extended Binary 
Coded Decimal Interchange Code 
(EBCDIC) mode or ASCII, with densi- 
ty equal to 1600 BPI or 6250 BPI, 
unlabeled or with IBM standard labels. 
Acceptable specifications for submis- 
sion of data on a floppy disk shall be 5 
1/4 or 3 1/2 inch IBM-PC compatible 
diskette. 

Data submitted via magnetic tape shall 
conform to the uniform record layout as 
required by the Commission. Data 
submitted via PC diskette shall also 
conform to a uniform record layout as 
required by the Commission. Copies of 
the required format may be obtained by 
contacting the Executive Director of the 
Medical Database Commission at 112 
Cox Avenue, Suite 208, Raleigh, North 



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610 



PROPOSED RULES 



Carolina, 27605. 
(c) Edit Criteria: 

(1) Data elements that are considered criti- 
cal fields on the HCFA 1450 UB 8 2 
form for record editing purposes are 
Patient Control Number, Bill TVpe, 
Medicaid Provider Number Federal Tax 
ID, Zip Code, Date of Birth, Sex, 
Admission Date, Admission Type, 
Source of Admission, Patient Status, 
Statement Covers Period, Revenue 
Codes and Charges, Primary Payer, 
Principal Diagnosis, Attending Physi- 
cian Identification. Records containing 
invalid HCFA 1450 UB 8 2 codes or 
all-blank fields for any of these data 
elements will be designated as error 
records. 

(2) Data elements that are considered criti- 
cal fields on the HCFA 1500 form for 
record editing purposes are Payer Iden- 
tification Insured's I.D. Number, Med 
icaid Provider number Federal Tax ID . 
Zip Code, Date of Birth, Sex, Dates of 
Service, place of service, type of ser- 
vice, procedures defined with 
CPT/HCPCS codes with modifiers, 
principle diagnosis codes, principle and 
secondary surgical procedure, patient's 
account number, physician' s PIN at- 
tending physician identification . Re- 
cords containing invalid HCFA 1500 
form codes or all blank fields for any 
of these data elements will be designat- 
ed as error records. 

(3) The last revenue code listed must be 
0W- 0001 , Total Charge, and this 
charge must equal the sum of charges 
for all other revenue codes reported. 
(HCFA 1450) 

(4) On the HCFA 1450 UB 8 2 form for 
inpatient cases, the following data 
elements must contain valid codes if 

present: Primary — Payer Specific 

Carrier Identification, Other Diagnoses, 
Principal Procedure Code and Date, 
Other Procedure Codes and Dates, 
External Cause of Injury Code. Other 
Physician Identification (if a procedure 
was performed). 

(5) For ambulatory surgery cases the fol- 
lowing data elements must contain valid 
codes if present: 

(7\) reported on HCFA 1450 UB 8 2 : 
Other Diagnoses. Other Procedure 



Codes and Dates. External Cause of 
Injury Code. Primary Payer — Specif - 
ic Carrier Identification, Other Diag - 
noses, Principal Proocduro Code and 
Date, — Other — Procedure — Codes — aad 
Dates, Identification of Surgeon per - 
forming the procedure. 
^B) — reported on HCFA 1500: Type cov - 
erage and insured ID number, specific 
carrier — identification, — procedures, 
s ervices — ef — supplies — m — CPT 4 — ©f 
HCPC code, dates of service, Phy s i 
cian PIN. 

(6) Upon completion of the data error 
assessment, the Commission or the 
designated contractor shall promptly 
notify each ho s pital — ef — ambulatory 
surgical facility data provider whose 
records do not pass the critical edit 
checks. This notification shall identify 
the discharge records and the data items 
within them which do not pass the 
edits. Each ho s pital data provider 
receiving an error notification report 
shall respond within 30 calendar days 
of the notification by making the neces- 
sary changes. 

(7) Upon receipt of a written request for an 
extension from the data provider, the 
Commission may, for good cause, 
extend the time for submitting the 
necessary changes for a particular 
reporting period. 

(d) Data Submission Arrangements: 

(1) Each hospital or ambulatory surgical 
facility data provider or its designated 
agent shall submit the required UB 8 2 
data directly to the Commission or to 
the designated contractor. 

(2) Resubmissions of data as required by 
the Commission or upon the initiative 
of a hospital or ambulatory surgical 
facility will be accepted for the purpos- 
es of adding records, amending data 
elements or otherwise making modifica- 
tions to a previous data submission. 
Resubmissions shall conform to the 
requirements of 11 NCAC 15 .0006(b). 

(e) Reimbursement for Data Submission: 

For HCFA 1450 UB 8 2 and HCFA 1500 
discharge records generated solely for 
submission to the Commission due to the 
absence of a third party payer, hospitals 
or ambulatory surgical facilities shall be 
reimbursed 40 cents ($0.40) per dis- 



611 



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PROPOSED RULES 



charge, regardless of the choice of medi- 
um for submission. 

Statutory Authority as. 131E-212(b). 

.0007 PROVIDER VERIFICATION 

Data Providers shall be given an opportunity to 
review and verify information pertaining to them 
in the database as follows: 

(1) Within ten calendar days after aW error 
corrections have been made and prepara- 
tion of the individual hospital' s data 
provider's dataset by the Commission is 
complete, each hospital data provider will 
be notified in writing of the opportunity 
to review its dataset. A summary compi- 
lation of the dataset, including number of 
discharges and total charges, will be 
attached to each data provider's data 
verification notice. Within 15 calendar 
days of the date of the notice, each ho s pi 
tal data provider shall return the notice to 
the Commission indicating that the accu- 
racy of the dataset summary compilation 
has been verified by the hospital data 
provider . 

(2) Within 15 calendar days of the date of 
the verification notice and summary 
compilation, a ho s pital data provider that 
wishes to review its dataset shall submit 
a written request to the Executive Direc- 
tor. The Commission shall provide the 
requested data within ten calendar days 
after receipt of the written request. 

(3) Within 30 calendar days of the 
Commission's release of the requested 
dataset, the hospital data provider shall 
notify the Commission in writing of those 
portions of the dataset which the ho s pital 
data provider believes are inaccurate. 
The hospital data provider shall include a 
written statement explaining why the 
identified portions are believed to be 
inaccurate and enclose any data which 
would assist in clarifying the possible 
inaccuracies. 

(4) If the Commission finds any error in a 
dataset, the dataset shall be corrected 
before the release of compilations from 
that dataset for public use. A notification 
of corrections made to a hospital' s data 
provider's dataset shall be provided to the 
appropriate hospital data provider by the 
Commission in writing prior to public 
release. If the Commission finds changes 



to the dataset are unnecessary or 
unwarranted, it shall notify the 
appropriate hospital data provider of this 
conclusion in writing prior to public 
release, including a brief but complete 
explanation of its determination. The 
compilations from the dataset will be 
available to the public seven calendar 
days following commission acceptance of 
the accurate dataset. 
(5) The Commission may, for good cause, 
grant an extension of these time limits 
upon receipt of written request from the 
ho s pital data provider . 

Statutory Authority as. 131E-212(b). 

.0008 COMPLIANCE 

(a) Compliance with these regulations and the 
act will be determined on a quarterly basis. The 
Commission shall consider a hospital data provider 
out of compliance with these regulations and the 
act when any of the following conditions apply: 

(1) The ho s pital data provider knowingly 
^Is to submit data in accordance with 
the provisions of these regulations. 

(2) More than three percent of the hospital's 
data provider's discharge records 
submitted during a quarter, are excluded 
from the database by the Commission 
because the records do not pass the 
critical edit checks as specified in 11 
NCAC 15 .0006(c) and the total 
percentage of discharge records felling 
critical edits for the preceding three 
quarters and the submitting quarter 
exceeds three percent. Upon notification 
by the Commission, hospital s data 
providers will be allowed to submit the 
corrected records in accordance with the 
requirements of 11 NCAC 15 .0006. 
Discharge records resubmitted to correct 
errors will not be counted in the 
determination of the error rate. 

(3) The ho s pital data provider has not 
submitted data for all of its discharges to 
the Commission in accordance with the 
required submission deadlines in 11 
NCAC 15 .0006(a). 

(h) Penalties ; penalties will apply for data for 
discharges or cases with date of service on or after 
1 October 1994. The Commission staff determine 
which data provider meets the criteria for penalties 
in accordance with Subparagraph (b)(1) and (2) of 
this Rule and provide the calculations of the 



9:9 



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August I, 1994 



612 



PROPOSED RULES 



penalties to the Commission board members. The 
board members will then consider these findings 
and vote deciding to invoke the entire penalty, a 
portion thereof, or none at alL The criteria to be 
used in deciding what level of the eligible penalty 
to invoke will include but not be limited to: the 
historic compliance of the data provider, and 
mitigating circumstances that prevented the data 
provider from su pplying the information. 

(1) Penalty for late submission of data will 
be calculated in accordance with the 
following formula: one hundred dollars 
($100.00) Eei day for each day the 
information is late (regardless of the 
number of records) PLUS: 

(A) for the lateness of a whole quarter of 
data = one dollar ($1.00) x 1/4 x total 
number of last years cases as reported 
to the North Carolina Division of 
Facilities Services; or 

(B) for the lateness of a month of data = 
one dollar ($1.00) x l/ll x total 
number of last years cases as reported 
to the North Carolina Division of 
Facilities Services. 

(2) Penalty for not meeting the 3% critical 
error rate ; effective October l^ 1994 
using previous 4 quarters of data to 
calculate the error rate - Minimum 
charge of ten dollars ($10. (X)). and 
would be calculated as follows: 30 
cents per discharge case with a critical 
error based upon statistic for critical 
errors as calculated in the control 

by 



reports generated 
database. 



the system 



Statutory Authority as. 131E-212(b). 

.0009 DATA ACCESSIBILITY 

(a) In accordance with G.S. 131E-213, the data 
collected from data providers shall not be 
considered public records. 

(1) The raw data shall be released by the 
Commission only to data providers 
which have submitted that particular 
data to the Commission, and which 
request to see and review its dataset for 
purposes of verifying information in the 
Commission's database pertaining to 
that data provider. These datasets are 
not public records. 

(2) State agencies will have access only to 
public record information as specified 
in G.S. 131E-212(f). 



(b) Only those reports and compilations 
prepared by the designated contractor in 
accordance with G.S. 131E-213 and with the 
provisions in 11 NCAC 15 .0009 and .0010 are 
public record. These reports shall include, but not 
be limited to comparative information on average 
charges, total and ancillary charge components, 
utilization rates, length of stay on diagnosis 
specific and procedure specific categories, and 
number of discharges, compiled in aggregate by 
health care provider, by diagnosis, and by primary 
payer category. 

(1) Compilations are not available for 
release and dissemination and are not 
public records until the data provider 
verification process has been 
completed. 

(2) The Commission shall not release any 
compilation of data for special studies 
and analysis for a purpose other than 
one authorized by the act. 
Compilations of data shall not contain 
patient identifying information. Only 
the data which can be released under 
requirements of the act shall be 
released. 

(3) Nothing in the act or these regulations 
shall prevent a ho s pital data provider 
from receiving upon request a copy of 
that ho s pital' s data provider's final 
edited dataset as it exists in the 
possession of the Commission. 

(c) Requests for Special Compilations. Any 
person, organization, govenmiental agency, or 
other entity may request the preparation of 
compilations of data collected by and furnished to 
the Commission in a specific manner or format not 
already used by the Commission. This includes 
requests for subsets of information already 
available from the Commission in compiled form. 

(1) All requests for compilations of data 
shall be made in writing to the 
Executive Director of the Commission. 
At minimum, the written request shall 
contain the name, address, and 
telephone number of the requester, a 
description of the requested compilation 
of data, a concise statement of the 
reason for the request, and the 
relationship of the requested 
compilation to a legitimate purpose. A 
"legitimate purpose" is a purpose 
consistent with the intent, policies, and 
purposes of the act. 

(2) The Commission shall review each 



613 



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August 1, 1994 



PROPOSED RULES 



request for a compilation of data and 
determine whether to approve or deny 
the request. The Commission shall 
notify the public of requests made for 
compilations by listing the requester, 
and providing a short description of the 
request on its official meeting agenda. 
Such requests shall be approved by the 
Commission which shall designate the 
form in which the information shall be 
made available. The approval or denial 
by the Commission of requests for 
compilations of data shall be within the 
discretion of the Commission. The 
Commission may deny a request for a 
compilation of data for reasons 
including, but not limited to, 
unavailability of data, the requested 
compilation is already available from 
the Commission or another source, the 
requested compilation of data would 
endanger patient confidentiality, the 
Commission lacks sufficient resources 
to fulfill the request, or the request is 
not related to a legitimate purpose. 

(3) The Commission shall notify the 
requester in writing of its decision. 
Denial of a request shall include a brief 
explanation of the reason for the denial. 

(4) The Commission or the designated 
contractor in consultation with the 
Commission shall also determine a fee 
to be charged to the requesting agency 
or private sector organization to cover 
the direct and indirect costs for 
producing special compilations. The 
fee should include staff time, computer 
time, copying costs, and supplies. For 
charging purposes, each compilation 
will be considered an original. 

(5) No f)erson, organization, governmental 
agency, or other entity receiving data 
from the Commission shall redisclose 
or redistribute that information for a fee 
in the same form without prior written 
approval from the Commission. 

Statutory Authority G.S. 131E-212(b). 

.0010 CONFTOENTIALITY OF DATA 

(a) The Commission shall ensure that any 
contract entered into with other parties for the 
purposes of processing and analysis of data 
collected under this regulation shall contain 
assurances that such other parties shall also comply 



with the provisions of pertinent state and federal 
regulations on patient confidentiality. 

(b) The Patient Control Number (HCFA 1450 
UB 8 2 form locator 3 ) and the Certificate/Social 
Security/Health Insurance Claim/Identification 
Number (HCFA 1450 UB 8 2 form locator 6 8) and 
Insured's I.D. Number (HCFA 1500 form locator 
4«) and the Patient Account Number (HCFA 1500 
form locator 26 ) shall be used only for the purpose 
of establishing an audit trail in the event that it is 
necessary to retrieve the primary source document 
for validation of the abstracted data. Data 
collected under these regulations and disclosed to 
other parties shall be purged of Patient Control 
Numbers, Certificate/Social Security/Health 
Insurance Claim/Identification Numbers and Dates 
of Birth prior to disclosure. 

(c) Raw data submitted to the Commission or to 
the designated contractor by data providers 
pursuant to the act shall be privileged and 
confidential, and shall not be disclosed in any 
manner. The foregoing includes, but shall not be 
limited to, disclosure, inspection or copying under 
the State's Public Record Act. However, these 
prohibitions shall not apply to the reports prepared 
for release and dissemination by the Commission. 

(d) For compilations released, the Commission 
will develop procedures to prevent small cell 
counts from potentially identifying an individual 
patient. 

Statutory Authority G.S. 131E-212(b). 

.0012 SUCCESSOR FORMS 

All references in this Section to claim forms, 
such as "HCFA 1500" and "HCFA 1450" 
"UB 8 2" , include references to their successor 
forms, such as "HCFA 1450" and "UB-92", that 
are developed pursuant to federal law under the 
auspices of HCFA, the National Uniform Billing 
Committee, or the North Carolina State Uniform 
Billing Committee. 

Statutory Authority G.S. 131E-212(b). 

TITLE 12 - DEPARTMEP^ OF 
JUSTICE 

I\otice is hereby given in accordance with G.S. 
150B-21.2 that the N.C. Alarm Systems Licensing 
Board intends to amend rule cited as 12 NCAC 11 
.0209. 



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August 1, 1994 



614 



PROPOSED RULES 



1 he proposed effective date of this action is 
November 1, 1994. 

1 he public hearing will be conducted at 2:00 
p.m. on August 30, 1994 at the State Bureau of 
Investigation, Conference Room, 3320 Old Gamer 
Road, Raleigh, N.C. 27626-0500. 

Jxeason for Proposed Action: Clarify language in 
the rule to specifically exempt a sole proprietor- 
ships that is owned and operated by a licensee. 

Lyomment Procedures: Interested persons may 
present their views either orally or in writing at 
the hearing. The Record of Hearing will be open 
for receipt of written comments until the hearing. 
Written comments must be delivered to the Private 
Protective Services Board, 3320 Old Gamer Road, 
Raleigh, N. C. 27626-0500 

CHAPTER 11 - N.C ALARM 
SYSTEMS LICENSING BOARD 

SECTION .0200 - PROVISIONS 
FOR LICENSEES 

.0209 COMPANY BUSINESS LICENSE 

(a) Any firm, association, or corporation re- 
quired to be licensed pursuant to G.S. 74D-2(a) 
shall submit an application for a corporate business 
license on a form provided by the Board. This 
application for license shall call for such informa- 
tion as the firm, association, or corporation name; 
the address of its principal ofiice within the State; 
any past conviction for criminal off'enses of any 
corporate director or officer; information concern- 
ing the past revocation, susjjension or denial of a 
business or professional license to any director or 
officer; a list of all directors and officers of the 
firm, association, or corporation; a list of all 
persons, firms, associations, corporations or other 
entities owning 10 percent or more of the outstand- 
ing shares of any class of stock; and the name and 
address of the qualifying agent. 

(b) In addition to the items required in Para- 
graph (a) of this Rule, a foreign corporation shall 
further qualify by filing with its application for a 
license, a copy of its certificate of authority to 
transact business in this state issued by the North 
Carolina Secretary of State in accordance with 
G.S. 55-131 and a consent to service of process 
and pleadings which shall be authenticated by its 



corporate seal and accompanied by a duly certified 
copy of the resolution of the board of directors 
authorizing the proper officer or officers to exe- 
cute said consent. 

(c) After filing a completed written application 
with the Board, the Board shall conduct a back- 
ground investigation to ascertain if the qualifying 
agent is in a management position. The Board 
shall also determine if the directors or officers 
have the requisite good moral character as defined 
in G.S. 74D-6(3). It shall be prima facie evidence 
of good moral character if a director or officer has 
not been convicted by any local. State, federal, or 
military court of any crime involving the use, 
carrying, or possession of a firearm; conviction of 
any crime involving the use, possession, sale, 
manufacture, distribution, or transportation of a 
controlled substance, drug, narcotic, or alcoholic 
beverage; conviction of a crime involving assault 
or an act of violence; conviction of a crime involv- 
ing breaking or entering, burglary, larceny, or any 
offense involving moral turpitude; or does not 
have a history of addiction to alcohol or a narcotic 
drug; provided that, for purposes of this Section, 
"conviction" means and includes the entry of a 
plea of guilty or no contest or a verdict rendered 
in open court by a judge or jury. 

(d) Upon satisfactory completion of the back- 
ground investigation, a corporate business license 
may be issued. This license shall be conspicuously 
displayed at the principle place of business within 
the State of North Carolina. 

(e) The corporate business license shall be 
issued only to the corporation and shall not be 
construed to extend to the licensing of its direc- 
tors, officers, or employees. 

(f) The issuance of the corporate business 
license is issued to the firm, association, or corpo- 
ration in addition to the license issued to the 
qualifying agent. Therefore, the qualifying agent 
for the firm, association, or corporation which has 
been issued the corporate business license shall be 
responsible for assuring compliance with G.S. 
74D. 

(g) A sole proprietorship that is owned and 
operated by an individual holding a current alarm 
systems business license shall be exempt from this 
Rule. 

Statutory Authority G.S 74D-2(a); 74D-5. 



615 



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PROPOSED RULES 



TITLE 15A - DEPARTMENT OF 

ENVIRONMENT, HEALTH, AND 

NATURAL RESOURCES 

Notice is hereby given in accordance with G.S. 
150B-21.2 that the EHNR - Environmental Man- 
agement Commission intends to adopt rule cited 
as 15 A NCAC 2Q .0112, with changes from the 
proposed text noticed in the Register, \blume 8, 
Issue 23, page 2319. 

Ihe proposed effective date of this action is 
October 1, 1994. 

Jxeasonfor Proposed Action: Based on comments 
received at public hearings held on March 28 and 
30, 1994, revisions of the proposed rule on requir- 
ing a professional engineer's seal on air permit 
applications are being considered. The Environ- 
mental Management Commission seeks comments 
on these revisions before making its final decision. 

Lyommsnt Procedures: All persons interested in 
this matters are invited to send in written com- 
ments. Written comments will be accepted through 
September 1, 1994. Comments should be sent to 
and additional information concerning this matter 
may be obtained by contacting: 

Mr Thomas C. Allen 

Division of Environmental Management 

PO. Box 29535 

Raleigh. North Carolina 27626-0535 

(919) 733-1489 

iLditor's Note: This proposed different rule does 
not affect the fiscal note previously submitted in 
accordance with 150B-21.4(b). 

CHAPTER 2 - ENVIROIVMENTAL 
MANAGEMENT 

SUBCHAPTER 2Q - AIR QUALITY 
PERMIT PROCEDURES 

SECTION .0100 - GENERAL 
PROVISIONS 

.0112 APPLICATIONS REQUIRING 

PROFESSIONAL ENGINEER SEAL 

(a) A professional engineer registered in North 
Carolina shall be required to seal technical por- 



tions of air permit applications consiatcnt with the 
practice of engineering as defined by G.S. 8 9 C 
ftfid that directly involve engineering tasks, inolud 
ing' 

(1) design, the evaluation or design of air 
pollution capture and control aystems; 
ef 

(2) determination of a pplicability and ap- 
propriateness, or and interpretation of 
cmiaaiona by calculation, such as ther 
modynamica, chemical reaction kinot 
io 8 , heat balance s , material balanooa, or 
published — cmiaaion — factor s — where — a 
range of values are given 

(3) determination and interpretation of 
performance. 

of air pollution capture and control systems . 

(b) The requirements of Paragraph (a) of this 
Rule do not app ly to A profes s ional engineer is not 
required to seal the following: 

(1) any source with non-optional air pollu- 
tion control equipment that constitutes 
an integral part of the process equip- 
ment as originally designed and manu- 
factured by the equipment su pplier : 

(2) sources that are permitted under Rule 
.0310 or .0509 of this Subchapter; 

(3) paint spray booths without air pollution 
capture and control systems for volatile 
organic compound emissions : 

(4) particulate emission sources with air 
flow rates of less than 10,000 actual 
cubic feet per minute; or 

(5) permit renewal if no modifications are 
included in the permit renewal applica- 
tion. 

Statutory Authority G.S. 143-215. 3(a)(1); 143- 
215.108. 

TITLE 18 - SECRETARY 
OF STATE 

J\otice is hereby given in accordance with G.S. 
150B-21.2 that the N. C. Department of the Secre- 
tary of State, Securities Division intends to amend 
rules cited as 18 NCAC 6 . 1205 - . 1206, . 1208 - 
. 1209, . 1302 - . 1305, . 1310, . 1313 - . 1314, . 1401 
- .1402, .1405, .1407, .1409, .1412 - .1413, 
.1702, .1704. .1713, .1901 - .1903 and adopt 
.1416. 



Ihe proposed effective date of this action 



is 



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616 



PROPOSED RULES 



December 1, 1994. 

1 he public hearing will be conducted at 10:00 
a.m. on October 3, 1994 at the Securities Division 
Conference Room, Suite 100, 300 N. Salisbury 
Street, Raleigh, NC 27603. 

ixeason for Proposed Action: 
18 NCAC 6 .1205 - .1206, .1208 -.1209, .1302 - 
.1305, .1310, .1313 - .1314, .1401 - .1402, .1405, 
.1407, .1409, .1412 -.1413, .1702, .1704, .1713, 
.1901 - .1903 - To generally update and clarify 
the administrative rules dealing with the regulation 
of securities in North Carolina. 
18 NCAC 6 .1416 - To define what actions and 
occurrences a securities dealer must report to the 
Securities Division of the Secretary of State's 
office, as well as the time period in which these 
reports must be submitted 

Lyomment Procedures: Interested persons may 
present oral or written statements at the public 
hearing, or in writing prior to the hearing by mail 
addressed to Mr Gene Cella, Administrator, 
Securities Division, N. C Dept. of the Secretary of 
State, 300 N. Salisbury St., Raleigh, NC 27603. 
For copies of any information related to the hear- 
ing call (919) 733-3924, or write to the aforemen- 
tioned address. The comment period will end on 
October 3, 1994. 

CHAPTER 6 - SECURITIES 
DIVISION 

SECTION ,1200 - EXEMPTIONS 

.1205 LIMITED OFFERINGS 

PURSUANT TO G.S. 78 A- 17(9) 

(a) Any issuer relying upon the exemption 
provided by G.S. 78A-17(9) in connection with an 
offering of a security made in reliance upon Rule 
505 or Rule 506 of Regulation D promulgated by 
the Securities and Exchange Commission under the 
Securities Act of 1933, as amended, 17 C.F.R. 
230.505 (1982) and 17 C.FR. 230.506 (1982) 
(and as subsequently amended) shall comply with 
the provisions of Rules .1206, .1207 and .1208 of 
this Section; provided that such compliance shall 
not be required if the security is offered and sold 
only to persons who will be actively engaged, on 
a regular basis, in the management of the issuer's 
business; and provided further, that compliance 
with provisions of Paragraphs (a), (b), and (c) of 



Rule .1208 of this Section shall not be required if 
the security is offered to not more than five indi- 
viduals who reside in this State. 

(b) Any issuer relying upon the exemption 
provided by G.S. 78A-17(9) in connection with an 
offering of a direct portioipation program security 
made solely in reliance upon an exemption from 
registration contained in Section 4(2) or Section 
3(a)(ll) of the Securities Act of 1933, as amend- 
ed, or made solely in reliance upon Rule 504 of 
Regulation D promulgated by the Securities and 
Exchange Commission under the Securities Act of 
1933, as amended, 17 C.FR. 230.504 (1982), 
(and as subsequently amended), shall comply with 
the following conditions and limitations: 

(1) No commission, discount, finder's fee 
or other similar remuneration or com- 
pensation shall be paid, directly or 
indirectly, to any person for soliciting 
any prospective purchaser of the securi- 
ty sold to a resident of this State unless 
such jjerson is either registered pursuant 
to G.S. 78A-36 or exempt from regis- 
tration thereunder or the issuer reason- 
ably believes that such p>erson is so 
registered or exempt therefrom. 

(2) In all sales of direct participation pro- 
gram securities. Real Estate Investment 
Trusts, and Limited Liability Compa- 
nies , the provisions of Rule .1313 of 
this Chapter regarding registered offer- 
ings of direct participation program 
securities. Real Estate Investment 
Trusts, and Limited Liability Compa- 
nies shall be applicable. 

(3) Any prospectus or disclosure document 
used in offering the securities in this 
state shall disclose conspicuously the 
legend(s) required by the provisions of 
Rule . 1 316 (a)(2) and .1316(a)(3) of this 
Chapter. 

(4) Not less than 10 business days prior to 
any sale offer of the securities to a 
resident of this State which s hall in 
elude but not be limited to the receipt 
by the issuer, or any person acting on 
the issuer's behalf of a signed subserip 
tion agreement of, or the receipt of 
consideration from, a purohasor , the 
issuer shall file with the administrator, 
or cause to be so filed: 

(A) A statement signed by the issuer and 
acknowledged before a notary public 
or other similar officer: 
(i) identifying the issuer (including 



617 



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PROPOSED RULES 



name, form of organization, 
address and telephone number); 
(ii) identifying the person(s) who will 
be offering and selling the securi- 
ties in this State and their titles 
(and in the case of such persons 
other than the issuer and its offi- 
cers, partners and employees, 
describing their relationship with 
the issuer in connection with the 
transaction and the basis of their 
compliance with or exemption 
from the requirements of G.S. 
78A-36) and describing any com- 
missions, discounts, fees or other 
remuneration or compensation to 
be paid to such persons; 
fiii) — containing — a — s ummary — ef — the 
propo s ed offering including! 

^ a description of the s ocuritioa 

to be sold; 
^S) — the — namc(8) — of all — general 
partner s of an i s suer which is 
a partnership and, with respect 
to a oorpwmtc issuer or any 
oorporote general partncr( s ) of 
any i s suer which i s a partner 
ship, the date and place of 
incorporation and the names of 
the — director s — and — cxocutivc 
officer s of s uch oorporation( s ); 
(ffi) — the anticipated aggregate dollar 

amount of the offering; 
^IV) — the anticipated required mini 
mum investment, — if any, — h^ 
each purchaser of the s ecurities 
to be offered; 
fV) — a — brief — description — ef — the 
issuer's business and the antio 
ipatcd use of the proceeds of 
the offering; and 
(V}) — a list of the s tates in which the 
securities arc propo s ed to be 

fv) containing — an — undertaking — te 

furnish to the admini s trator, upon 
written request, a copy of any 
written — document — ©f — materials 
used or propo s ed to be u s ed in 
oonncction with the offer and sale 
of the securities. 

(iii) containing an undertaking that no 
securities offerings by the issuer 
have occurred in the last three 
years or submit infbrmation con- 



cerning the prior offerings. 

(B) A consent to service of process nam- 
ing the North Carolina Secretary of 
State as service agent using the Uni- 
form Consent to Service of Process 
(Form U-2) signed by the issuer and 
acknowledged before a notary public 
or other similar officer; and accompa- 
nied by a properly executed Corporate 
Resolution (Form U-2A), if applica- 
ble; 

(C) A non-refundable filing fee in the 
amount of t wenty five — dollars 
($25.00) one-hundnsd fifty dollars 
($150.00) . payable to the North Caro- 
lina Secretary of State. 

(D) A Notice of Completion of OfFer- 
ing/Fmal Sales Re port in compliance 
with Rule .1315 as if Rtde .1315 
a pplied to offerings exempted under 
this Rule .1206. 

(E) A copy of Miy written document or 
materials proposed to be used in 
connection with the offer and sale of 
the securities to be sold must be filed 
at least 10 business days prior to the 
offer in North Carolina. 

(F) A form D (Notice of Sales of Securi- 
ties Pursuant to Regulation D. ..and/or 
Uniform Limited Offering Exemp- 
tion). All parts of this form, includ- 
ing the A ppendix, shall be completed. 
The Form D is to be signed by a 
person duly authorized to do so by the 
issuer, and shall be attached to a 
statement containing the su pplemental 
infbrmation required by Paragraph (c) 
of Rule .1208. 

(5) Compliance with the provisions of 
Subparagraph (4) of this Rule shall not 
be required if the security is offered to 
not more than five individuals who 
reside in this State. If the issuer is 
relying on the exclusion from the filing 
requirements for less than five offerees 
in North Carolina, then the issuer must 
submit an undertaking that the offering 
meets the suitability, minimum initial 
cash investment and legend require- 
ments of the Rules. Issuers must also 
submit a twenty-five dollar ($25 .(X)) 
non-refundable filing fee, a U-2. and a 
U-2A if appropriate. 

(6) No exemption under this Rule .1205 is 
available for the offer or sale of securi- 



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618 



PROPOSED RULES 



ties if the issuer or any other person or 
entity to which Rule .1205 applies is 
disqualified pursuant to Rule .1207 of 
this Section unless the administrator, 
upon application and a showing of good 
cause by the issuer, or such other per- 
son or entity, modifies or waives the 
disqualification. 
(7) Limit expenses to 25% as calculated in 

1307rb). as if Rule .1307 were applicable 
to ofl'erings exempted under this Rule 
.1205. 

(c) Neither the issuer nor any person acting on 
the issuer's behalf shall offer, ofl"er to sell, offer 
for sale or sell the securities claimed to be exempt 
under G.S. 78A-17(9) by any means or any form 
of general solicitation or general advertising. 

(d) The administrator may, by order, waive any 
condition of or limitation upon the availability of 
the exemption provided by G.S. 78A-17(9). 

(e) To continue the offering beyond one year 
from when the exemption filing was perfected with 
the Division, the issuer must submit a statement 
requesting renewal, a current Form D. and a 
twenty-five dollar ($25.00) fee. 

Statutory Authority G. S. 78A-17(9); 78A-49(a). 

.1206 LIMITED OFFERING EXEMPTION 
PURSUANT TO G.S. 78A-17(17) 
(a) Transactions made in reliance upon Rule 505 
or Rule 506 of Regulation D promulgated by the 
Securities and Exchange Commission under the 
Securities Act of 1933, as amended, 17 C.ER, 
230.505 (1982) and 17 C.F.R. 230.506 (1982) 
(and as subsequently amended), including any ofl'er 
or sale made exempt by application of Rule 508(a), 
as made effective in Release No. 33-6389 and as 
amended in Release Nos. 33-6437, 33-6663, 
33-6758, and 33-6825, shall be exempt from the 
requirements of G.S, 78A-24, provided there is 
compliance with the conditions and limitations of 
this Rule .1206 and Rules .1207 and .1208 of this 
Section. 

(1) No exemption under this Rule .1206 is 
available for the offer or sale of securi- 
ties if the issuer or any other person or 
entity to which Rule .1206 applies is 
disqualified pursuant to Rule .1207 of 
this Section unless the administrator, 
upon application and a showing of good 
cause by the issuer, or such other per- 
son or entity, modifies or waives the 
disqualification. 

(2) No commission, discount, finder's fee 



or other similar remuneration or com- 
pensation shall be paid, directly or 
indirectly, to any person for soliciting 
any prospective purchaser of any secu- 
rity sold to a resident of this State in 
reliance upron the exemption provided 
by this Rule .1206 unless such person 
is either registered pursuant to G.S. 
78A-36 or exempt from registration 
thereunder or the issuer reasonably 
believes that such person is so regis- 
tered or exempt therefrom. 

(3) In all sales to those accredited investors 
defined in 17 C.FR. 230.501(a)(5) 
who reside in this State (except sales to 
such accredited investors made by or 
through a dealer registered under G.S. 
78A-36) and in all sales to non- 
accredited investors who reside in this 
State the issuer and any jjerson acting 
on its behalf shall have reasonable 
grounds to believe and after making 
reasonable inquiry shall believe that one 
of the following conditions is satisfied: 

(A) The investment is suitable for the 
purchaser upon the basis of the facts, 
if any, disclosed by the purchaser as 
to his/her other security holdings and 
as to his/her financial situation and 
needs. For the purpose of this condi- 
tion only, it may be presumed that if 
the investment does not exceed 10 
percent of the investor's net worth, it 
is suitable. 

(B) The purchaser, either alone or with 
his/her purchaser representative(s), 
has such knowledge and experience in 
financial and business matters that 
he/she is or they are capable of evalu- 
ating the merits and risks of the pro- 
spective investments. 

(4) In all sales of direct participation pro- 
grams, Real Estate Investment Trusts 
and Limited Liability Companies secu- 
rities pursuant to the exemption provid- 
ed by this Rule . 1 206, the provisions of 
Rule .1313 of this Chapter regarding 
registered offerings of direct participa- 
tion programs. Real Estate Investment 
Trusts and Limited Liability Companies 
securities shall be applicable in addition 
to all other requirements of this Rule 
.1206. 

(5) Any prospectus or disclosure document 
used in this state in connection with an 



619 



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PROPOSED RULES 



offer and sale of securities made in 
reliance upon the exemption provided 
by this Rule .1206 shall disclose 
conspicuously the legend(s) required by 
the provisions of Rule ■131 6(a)(2) and 
(a)(3) of this Chapter. 

(6) Nothing in the exemption provided by 
this Rule .1206 is intended to or should 
be construed as in any way relieving 
the issuer or any person acting on 
behalf of the issuer from providing 
disclosure to prospective investors 
adequate to satisfy the antifraud 
provisions of the Act. 

(7) Transactions which are exempt under 
this Rule may not be combined with 
offers and sales exempt under any other 
rule or section of this Act; however, 
nothing in this limitation shall act as an 
election. Should for any reason, an 
offer and sale of securities made in 
reliance upon the exemption provided 
by this Rule .1206 fail to comply v^th 
all of the conditions hereof, the issuer 
may claim the availability of any other 
applicable exemption. 

(8) A failure to comply with a term, 
condition or requirement of 
Subparagraphs (a)(2) and (a)(3) of this 
Rule will not result in loss of the 
exemption from the requirements of 
G.S. 78A-24 for any offer or sale to a 
particular individual or entity if the 
person relying on the exemption shows: 

(A) the failure to comply did not pertain 
to a term, condition or requirement 
directly intended to protect that 
particular individual or entity; and 

(B) the failure to comply was insignificant 
with respect to the offering as a 
whole; and 

(C) a good faith and reasonable attempt 
was made to comply with all 
applicable terms, conditions and 
requirements of Subparagraphs (a)(2) 
and (a)(3). 

Where an exemption is established only 
through reliance upon this 
Subparagraph (8) of this Rule, the 
feilure to comply shall nonetheless be 
actionable by the administrator under 
G.S. 78A-47. 

(9) In any proceeding involving this Rule 
.1206, the burden of proving the 
exemption or an exception from a 



definition or condition is Uf)on the 
person claiming it. 

(10) In view of the objective of this Rule 
.1206 and the purpose and policies 
underlying the Act, this exemption is 
not available to any issuer with respect 
to any transaction which, although in 
technical compliance with this Rule 
.1206, is part of a plan or scheme to 
evade registration or the conditions or 
limitations explicitly stated in this Rule 
.1206 or Rules .1207 and .1208 of this 
Section. 

(11) The administrator may, by order, waive 
any condition of or limitation upon the 
availability of the exemption provided 
by this Rule .1206. 

(12) The exemption provided by this Rule 
. 1206 shall be known and may be cited 
as the "North Carolina Limited 
Offering Exemption." 

(b) Pursuant to G.S. 78A-18, the administrator 
may by order deny or revoke the exemption 
provided by this Rule .1206 with respect to a 
specific security or security transaction. 

Statutory Authority G.S. 78A-17(17); 78A-49(a). 

.1208 TRANSACTIONS EXEMPT 

UNDER RULE .1206: FILING 
REQUIREMENTS 

(a) Not less than 10 business days prior to any 
srie offer of a security seW offered in reliance 
upon the exemption provided by Rule .1206 of this 
Section, which s hall include but not be limited to 
the receipt by the iasucr, or any per s on acting on 
the — iaaucr's — behalf — ef — a — s igned — s ubscription 
agreement of, or the receipt of con s ideration from, 
a — purchaser, the issuer shall file with the 
administrator, or cause to be so filed, the 
following: 

(1) A Form D (Notice of Sales of 
Securities Pursuant to Regulation 
D. ..and/or Uniform Limited Offering 
Exemption). All parts of this form, 
including the Appendix, shall be 
completed. The Form D is to be 
signed by a person duly authorized to 
do so by the issuer, and shall be 
attached to a statement containing the 
supplemental information required by 
Paragraph (c) of this Rule .1208. 

(2) A copy of any written document or 
materials proposed to be used in 
connection with the offer and sale of 



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620 



PROPOSED RULES 



the securities to be sold; provided, 
howc'cr, — if any — &«efe — documents — ef 
materials arc not available to be filed 
10 business days prior to any sale of 
the securities to a person who resides in 
this State. — they shall be filed when 
available, but, in any event, no lat e r 
than 5 business days before any such 
sale. Supplements or amendments to 
any such written document or materials 
shall be filed within 5 business days 
after prior to delivery to any 
prospective purchaser of the securities. 

(3) A consent to service of process naming 
the North Carolina Secretary of State as 
service agent using the Uniform 
Consent to Service of Process (Form 
U-2) signed by the issuer and 
acknowledged before a notary public or 
similar officer; and accompanied by a 
properly executed Corporate Resolution 
(Form U-2A), if applicable. 

(4) A non-refundable filing fee in the 
amount of seventy five dollars ($75.00) 
one-hundred fifty dollars ($150.00) , 
payable to the North Carolina Secretary 
of State. 

(b) The issuer shall promptly file or caused to 
be filed with the administrator any amended Form 
D filed with the U.S. Securities and Exchange 
Commission in connection with the transaction. 

(c) To comply with Subparagraph (a)(1) of thi s 
Rttk — .120 8 , — tb« — issuer — sfeaH — fik — v.4tb — tbe 
administrator a statement signed by a person duly 
authorized to execute such s tatement on its behalf 
The issuer shall file a statement verified before a 
notan,' public and a copy of any power of attorney 
containing the following representations: 

(1) that the securities will be sold in 
reliance upon an exemption from the 
registration requirements of Section 5 
of the Securities Act of 1933, as 
amended; 

(2) that, to the best of the issuer's 
knowledge, the issuer is not disqualified 
by the provisions of Rule .1207 of this 
Section from relying upon the 
exemption provided by Rule .1206 of 
this Section; 

(3) that the issuer will furnish to the 
administrator, upon written request, 
evidence of compliance with 
Subparagraphs (2), (3) and (4) of Rule 
.1206(a) of this Section; 

(4) that all f>ersons who will be selling the 



securities in this state are in compliance 
with or exempt from the requirements 
of G.S. 78A-36; aed 

(5) that the issuer will notify the adminis- 
trator in writing of the names and titles 
of all officers, directors, partners, or 
employees of the issuer who will be 
engaged in the offer or sale of the 
securities in this state. Such notice to 
the administrator shall be made prior to 
any offer of securities in this staterj and 

(6) that no securities offerings have oc- 
curred in the last three years or submit 
informati on concerning the prior offer- 
ings. 

(d) Any filing pursuant to this Rule .1208 shall 
be amended by filing with the administrator such 
information and changes as may be necessary to 
correct any material misstatement or omission in 
the filing. 

(e) The provisions of this Rule .1208 shall not 
apply to offers or sales of a security made pursuant 
to Rule .1206 of this Section if the security is 
offered to not more than five individuals who 
reside in this State. If the issuer is relying on the 
exclusion from the filing requirements for less than 
five offerees in North Carolina, then the issuer 
must submit an undertaking that the offering meets 
the suitability, minimum initial cash investment 
and legend requirements of the Rules. Issuers 
must also submit a twenty-five dollar ($25.00) 
non-refundable filing fee, a U-2. and a U-2A if 
appropriate. 

(f) The issuer must submit a statement request- 
ing renewal along with a current Form D and a 
twenty-five dollar ($25.00) foe if it wishes to 
continue the offering beyond one year from when 
the exemption filing was perfected with this office. 

(g) Limit expenses as calculated in Rule .1307 
to 25%. as if Rule .1307 was applicable to offer- 
ings exempted under this Rule .1208. 

(h) The issuer shall promptly file a Notice of 
Completion of Offering/Fmal Sales Report in 
compliance with Rule .1315. 

Statutory Authority G. S. 78A-17(17); 78A-49(a). 

.1209 NONPROFIT SECURITIES 

(a) The exemption provided by G.S. 78A-16(9) 
from the registration requirements of G.S. 78A-24 
for securities offered, or to be offered, and sold by 
any person operated not for private profit but 
exclusively for religious, educational, benevolent, 
charitable, fraternal, social, athletic, or reformato- 
ry purposes, or as a chamber of commerce or 



621 



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PROPOSED RULES 



trade or professional association shall not be 
available where: 

(1) The issuer is disqualified by Rule .1207 
of this Section. For the purposes of 
determining the availability of the 
exemption provided by G.S. 78A-16(9), 
the issuer also shall be disqualified 
under Rule .1207 of this Section where 
the trustee of a trust indenture under 
which the securities are to be issued is 
subject to the disqualifications of Sub- 
paragraphs (a)(1) through (6) of Rule 
.1207 of this Section. 

(2) The issuer, or any affiliate or predeces- 
sor has had any material default within 
five years prior to commencement of 
the offering in the payment of: 

(A) principal, interest, dividend or sinking 
fund installment on any security or 
indebtedness for borrowed money; or 

(B) rentals under material leases with 
terms of three years or more. 

(3) Any part of the net earnings of the 
nonprofit issuer inures to the benefit of 
any other person. 

(4) The issuer foils to comply with the 
requirements of Paragraph (b) of this 
Rule and, if applicable or appropriate. 
Paragraphs (c) and (d) of this Rule. 

Provided, however, that the administrator may 
modify or waive, upon the showing of good cause 
in writing, any disqualification that results from 
Subparagraphs (a), (1), (2) or (3) of this Rule. 

(b) No commission, discount, finder's fee or 
other similar remuneration or compensation shall 
be paid, directly or indirectly, to any person for 
soliciting any prospective purchaser of any security 
sold to a resident of this State in reliance upon this 
exemption unless such person is cither registered 
pursuant to G.S. 78A-36 or exempt from registra- 
tion thereunder or the i s suer rcoaonably boliovos 
that s uch per s on i s s o regi s tered or exempt there 
from. 

(c) The nonprofit issuer should provide each 
offeree a written document providing full disclo- 
sure of all material facts. A prospectus, pamphlet, 
circular or similar literature providing the follow- 
ing minimum disclosures, if applicable, normally 
will suffice for this purprose; provided, however 
that nothing in this Paragraph shall be construed as 
in any manner relieving any person from the full 
disclosure requirements of G.S. 78A-8(2): 

(1) The Cover or First Page: 

(A) The name of the issuer; 

(B) Title of securities; 



(D) 
(E) 
(F) 



(G) 



(C) In tabular form, the per unit and 
aggregate price to the public, under- 
writing or selling commissions and 
expenses, and net proceeds to the 
issuer; 

Name of dealer or financial adviser; 
Names of trustee and paying agent; 
If the offering is being made only to 
certain persons, a description of such 
offerees; 

The appropriate disclaimer and/or 
legend, pursuant to the provisions of 
Rule .1316 of this Chapter, shall 
appear in boldface type and a mini- 
mum of \2 point size; 

(H) If appropriate, the following statement 
shall appear in boldface and a mini- 
mum of 14 point size : THIS OFFER- 
ING IS SUBJECT TO CERTAIN 
RISKS. (See "Risk Factors"); and 

(I) The date of the disclosure document. 

(2) A Table of Contents. 

(3) The Issuer: 

(A) The name, address, organization (state 
in which organized, date organized, 
statute under which organized, and 
form of organization) and purpose of 
the issuer; 

(B) The history of the issuer; 

(C) A description of the general area and 
location of the issuer; 

(D) Accreditation and regulation of the 
issuer; 

(E) The number of paid employees and a 
description of any employee benefit 
plans along with the key person's 
annual compensation package which 
should include salary, benefits, allow- 
ances, bonuses, etc. ; 

(F) Any affiliation between the issuer and 
the dealer, or any officers, directors 
or general partners or any person 
holding a similar position of either, 
with any building contractor or sup- 
plier who has an interest in or may 
receive any of the proceeds of the 
offering or with any trustee of a trust 
indenture under which the securities 
are to be issued. 

(4) Risk Factors: Where appropriate, risk 
fectors in connection with the offering 
must be disclosed. Reference to risk 
factors should note the page number of 
the disclosure document at which they 
may be found or further disclosure is 



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622 



PROPOSED RULES 



made. Risk factors that should be 
considered include, but are not limited 
to, the following examples: 

(A) There is no market for the securities, 
and there is no assurance that a 
market will develop. Consequently, 
investors may not be able to resell 
any securities purchased should they 
need to or wish to do so for 
emergency purposes or otherwise 

(B) The issuer is primarily dependent 
upon contributions of the membership 
to meet expenses for operation of the 
issuer and payments of principal and 
interest of the securities. The issuer 
may not receive sufficient funds to 
meet these obligations. 

(C) During the past . . . fiscal years, the 
issuer has operated at a loss, and is 
currently not earning sufficient 
income to pay the principal and 
interest on the securities offered 
hereby. There is no assurance the 
issuer will be able to meet debt 
service requirements in the future 

(D) These securities will mature and 
become payable on . . . and it is 
anticipated the issuer will attempt to 
refinance them at that time. There is 
no assurance that refinancing funds 
will be available at that time or that 
such funds will be available at terms 
acceptable to the issuer. 

(E) These securities are not secured by 
land, buildings or equipment of the 
issuer. In the event of default, the 
investor has the status of an unsecured 
creditor. 

(F) The issuer has defaulted on a previous 
issue of securities. TTiis issue is for 
the purpose of refinancing. 

(G) The trust indenture permits the issuer 
further to encumber the property 
securing these securities through the 
future issuance of additional 
securities. 

(5) Use of Proceeds: 

(A) An itemized statement as to the 
application of the proceeds of the 
offering. If additional funds are 
needed to accomplish the stated 
purposes, this should be disclosed, 
together with a statement showing 
how such funds will be obtained. 

(B) If there is to be an escrow of funds, a 



description of the escrow 
arrangements. 

(6) Description of Property: 

(A) In addition to describing physical 
proi>erties, a valuation of mortgaged 
property should be included as 
follows: Total valuation of existing 
land, buildings, improvements and 
equipment before the offering: 

$ . ; and total valuation of land, 

buildings, improvements and 
equipment after the offering and upon 
completion of construction: $ . . 

(B) The person preparing any appraisals 
shall be identified, and his 
qualifications for serving as such shall 
be indicated. 

(7) Management and Control: 

(A) The name and principal occupation of 
each officer, trustee, director, general 
partners or other persons holding 
similar positions. In the case of 
religious organizations, a brief 
summary of the background of the 
minister(s) and any other imjjortant 
church officials should be included. 

(B) A description of any material 
transactions or proposed transactions 
between the issuer and such persons 
or any affiliate of such persons. 

(8) Material Litigation and Transactions. 
Any pending or threatened litigation 
which may materially affect the issuer's 
income. Any contracts with the issuer 
which, if terminated, would materially 
affect the issuer's income. 

(9) Description of Securities: 

(A) Description of the indenture under 
which the securities are to be issued, 
should include information as to: 



(i) 



and interest payment 



interest 

dates, 

default, 

redemption, 

subordination, 

sinking fund, 

subsequent issues, 

modification of the indenture, 

insurance coverage on properties 

of the issuer, and 

any other material facts regarding 

the rights of holders. 

(B) A pay-back or maturity schedule. 

(C) If guarantees of payment are made by 
any other person, information 



(ii) 

(iii) 

(iv) 

(V) 

(vi) 

(vii) 

(viii) 

(ix) 



623 



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August 1, 1994 



PROPOSED RULES 



describing the ability of that person to 
guarantee, including financial 
statements, shall be included. Note: 
- A guarantee in and of itself involves 
the offering of a separate security 
which may require registration. 

(10) Plan of Distribution: 

(A) The name and address of the dealer 
and fund raising adviser. 

(B) The aggregate underwriting or selling 
commissions or similar compensation 
or remuneration. 

(C) A brief description of any 
underwriting arrangements or 
distribution plan, including whether 
best efforts or firm commitment, and 
whether exclusive or nonexclusive. 

(11) Financial Statement: 

(A) Balance sheet, within four months 
prior to the date of the first offer in 
reliance upon this exemption, 
prepared in accordance with generally 
accepted accounting principles. 

(B) Income and expense statements for 
each of the three fiscal years 
preceding the date of the balance 
sheet and for any period between the 
close of the last fiscal year and the 
date of the balance sheet or such 
shorter period as the issuer has been 
in existence prepared in accordance 
with generally accepted accounting 
principles. 

(C) Any statements or information 
necessary to explain extraordinary or 
non-recurring fluctuations in the 
statements supplied. 

(D) If applicable, the number of pledging 
units and the average annual 
contribution per pledging unit. 

(12) Filing Fees. The filing fee of one 
hundred dollars ($100.00) must be 
submitted payable to the Secretary of 
State and shall be submitted with the 
request for exemption and renewal of 
exemption. The filing fee shall be 
retained by the administrator in all 
cases, whether the exemption is 
granted, denied, or withdrawn. 

In lieu of the disclosure document as described in 
this Paragraph, the issuer may use a disclosure 
document prepared in accordance with the Church 
Bond Guidelines prepared by NASAA published at 
Par. 1001 of CCH NASAA Reports, as may be 
amended from time to time, where such guidelines 



are applicable. 

(d) Not less than five 15 business days prior to 
any sale offer of a security in reliance upon the 
exemption provided by G.S. 78A-16(9) which shall 
include but not be limited to the receipt by the 
issuer, or any person acting on the issuer's behalf 
of a signed subscription agreement of, or the 
receipt of consideration from, a purchaser, the 
issuer shall file with the administrator, or cause to 
be so filed, the following information unless the 
content or time of filing is modified or waived by 
the administrator; provided, however that the filing 
is not required, unless requested by the 
administrator, where the offering is to be made 
exclusively to members of the nonprofit issuer and 
occupants of such members' households: 

(1) A statement, signed by the issuer and 

acknowledged before a notary public or 

other similar officer: 

(A) Identifying the issuer, including the 
name, form of organization, date and 
state of organization, the nonprofit 
purpose for which the issuer is 
organized, address, telephone number 
and the appropriate representative to 
resfKind to questions; 

(B) Identifying who will be selling the 
securities in this state and whether 
commissions, remuneration or 
compensation will be paid and the 
terms thereof; 

(C) Describing the securities to be sold, 
including the type, aggregate offering 
amount to be offered in this state and 
the issue of which they are a part; 

(D) Representing that the issuer is not 
disqualified by Paragraph (a) of this 
Rule from reliance upon this 
exemption; 

(E) Representing that a disclosure 
document as may be required by 
Paragraph (c) of this Rule will be 
delivered to each purchaser prior to 
consummation of a sale or execution 
of a subscription agreement, or a 
statement as to the reasons the issuer 
believes that the disclosure document 
is unnecessary or inappropriate; 

(F) Representing that in the event of any 
material change in the security or 
offering or if the disclosure document 
becomes incomplete in any material 
respect or contains any statement 
which is in the light of the 
circumstances under which it is made. 



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624 



PROPOSED RULES 



felse or misleading with respect to 
any material feet, the sale or offer for 
sale pursuant to this exemption will 
immediately cease, and will not be 
resumed until corrective disclosures 
are prepared and all prior purchasers 
are provided rescission offers 
pursuant to G.S. 78A-56(g). 

(2) An opinion of counsel relating to the 
"not for private profit" status of the 
issuer, the formation and good standing 
of the issuer, legality of the securities 
to be issued, and the validity of the 
indenture under which the securities are 
to be issued, or a letter of 
determination of tax exempt status 
issued by the Internal Revenue Service. 

(3) A consent to service of process (Form 
U-2) signed by the issuer and verified 
by a notary public or similar officer, 
naming the Secretary of State as service 
agent and accompanied by a corporate 
resolution of the board of directors, 
(Form U-2 A), if applicable, authorizing 
the consent. 

(e) Nothing in this Rule .1209 is intended to or 
should be construed as in any way relieving the 
issuer or any person acting on behalf of the issuer 
from providing disclosure to prospective investors 
adequate to satisfy the antifraud provisions of the 
Act. 

(f) Should for any reason, an offer and sale of 
securities made in reliance upon the exemption 
provided by G.S. 78A-16(9) feil to comply with all 
of the conditions hereof, the issuer may claim the 
availability of any other applicable exemption. 

(g) Any offer or sale shall be deemed to have 
been made in compliance with the exemption 
provided by G.S. 78A-16(9) if the issuer has 
substantially complied in all material resp>ects with 
this Rule and G.S. 78A-16(9) would otherwise be 
available. 

(h) In view of the objective of this Rule and the 
purpose and policies underlying the Act, the 
exemption provided by G.S. 78A-16(9) is not 
available to any issuer with respect to any 
transaction which although in technical compliance 
with the exemption provided by G.S. 78A-16(9) 
and this Rule, is part of a plan or scheme to evade 
registration or the conditions or limitations 
explicitly stated in this Rule. 

(i) If the issuer or the registered agent fails to 
sell the dollar amount of securities exempt from 
registration, pursuant to G.S. 78A-16(9), within 
one year from the effective date of the exemption. 



the issuer may request renewal of the original 
exemption for an additional one year. This can be 
accomplished by filing a request for renewal 
along with an updated prospectus which shall 
include current financial statements and any 
material change regarding the ofiFering. The 
renewal of the original exemption can be made 
annually up to four consecutive years following the 
expiration date of the original exemption. The 
request for renewal shall be made within 30 days 
prior to the expiration date of the original or 
renewal of exemption. 

Statutory Authority G.S. 78A-16(9); 78A-49(a). 

SECTION .1300 - REGISTRATION 
OF SECURITIES 

.1302 REGISTRATION BY 
COORDINATION 

(a) Application for registration by coordination 
shall be filed with the administrator using the 
Uniform Application To Register Securities (Form 
U-1). Documents necessary to establish eligibility 
for registration by coordination shall be attached. 

(b) An issuer of securities registered by 
coordination must re-register the securities on the 
one year anniversary of the date of original 
registration. The request for re-registration must 
comply with all the requirements of G.S. 78A-26 
and be accompanied by a report of sales to that 
date in North Carolina expressed in units and 
dollars. 

Statutory Authority G.S 78A-26; 78A-49(a). 

.1303 REGISTRATION BY 
QUALIFICATION 

(a) Application for registration by qualification 
shall be filed with the administrator using the 
Uniform Application To Register Securities (Form 
U-1). Documents necessary to establish eligibility 
for registration by qualification shall be attached. 

(b) As a condition to registration by 
qualification the applicant shall prepare a 
prospectus which shall, after approval by the 
administrator, be sent or given to each person to 
whom an offer is made before or concurrently with 
whichever of the following events first occurs: 

(1) the first written offer made to him 
(otherwise than by means of a public 
advertisement) by or for the account of 
the issuer or any other person on whose 
behalf the offering is being made, or by 
any underwriter or dealer who is 



625 



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PROPOSED RULES 



offering part of an unsold allotment or 
subscription taken by him as a 
participant in the distribution; 

(2) the coniirmation of any sale made by or 
for the account of any such person; 

(3) payment pursuant to any such sale; or 

(4) delivery of the security pursuant to any 
sale. 

(c) The prospectus requirement of Paragraph (b) 
of this Rule may be satisfied by the use of the 
NASAA Form U-7 (Small Corporate Offerings 
Registration Form) (as found at CCH NASAA 
Reports 5057) if the use of that form is allowed by 
the instructions to Form U-7 for the securities 
offering being registered. 

(d) Within four months of the date of filing for 
registration, the a pplicant must submit financial 
statements for review by the Administrator. For 
offerings greater than five hundred thousand 
dollars ($500.000), these financial statements must 
be audited. 

(e) When the Administrator deems that an 
impoundment agreement is necessary, the proceeds 
from the offering must be deposited in an escrow 
account with an impoundment agent a pproved by 
the Administrator. This impoundment of proceeds 
must comply with the requirements set forth in 
CCH NASAA REPORTS 12151-2156. 

(f) Only tombstone ads, as defined in \1_ C.F.R. 
§230.134. are allowed for offerings made utilizing 
form U-7. 

(g) An issuer must re-register the securities prior 
to the one year anniversary of the offering's 
effectiveness. The request for re-registration must 
comply with all the requirements of G.S. 78A-27 
and be accompanied by a report of sales to that 
date in North Carolina expressed in units and 
dollars. 

Statutory Authority G.S. 78A-27(d); 78-27(b); 
78A-49(a). 

.1304 SECURITIES REGISTRATION 
AND FILING FEES 

(a) All fees (registration and filing) are payable 
to the Office of the Secretary of State and shall be 
submitted with the application for original, 
renewal, or additional registration. The 

registration fee shall be retained by the 
administrator, except where the registration is not 
granted by the administrator or where the 
registration is withdrawn at the request of the 
applicant and with the consent of the administrator. 
The filing fee shall be retained by the 
administrator in all cases. 



(b) The aggregate offering amount of an original 
or amended registration may be increased prior to 
or after the effectiveness of the registration by 
providing the administrator the following: 

(1) An additional registration filing fee of 
fifty dollars ($50.00) if such filing 
occurB after the cflfootivo dnto of the 
offering ; 

(2) The appropriate registration fee 
calculated in the manner specified in 
G.S. 78A-28(b), provided the maximum 
registration fee has not been paid; and 

(3) An amendment to the Uniform 
Application to Register Securities 
(Form U-1). 

Additional registrations shall be effective when the 
administrator so orders. The registration statement 
for a mutual fund or open-end management 
company may specify an indefinite aggregate 
offering amount if such offering amount is 
similarly registered with the Securities and 
Exchange Commission. The registration statement 
for a unit investment trust must specify a definite 
aggregate offering amount expressed in dollars and 
shall not exceed the offering amount registered 
with the Securities Exchange Commission. 

(c) A registration statement relating to securities 
issued or to be issued by a mutual fund or 

open-end management company^ ©f aait 

investment tru s t, to be offered for a period in 
excess of one year, must be renewed annually by 
payment of a renewal fee of one hundred dollars 
($100.00) and by filing the following: 

(1) A copy of the current prospectus and 
any other offering materials not 
previously filed ; 

(2) One copy of any amendments to the 
registration statement not previously 
filed; and 

(3) A s tatement sales report on form USR- 
\ of the amount of securities sold in 
this state to date and the balance of 
unsold securities effectively registered 
in this state, expressed in dollars. 

The payment of the renewal fee and the filing of 
the listed documents and rep>orts in this Rule shall 
be made no earlier than November 15th and, to 
assure timely renewal, should be made no later 
than December 15th. Renewal must be perfected 
prior to December 31 of each year and failure to 
timely renew will result in the expiration of the 
registration statement. 

(d) A registration statement relating to securities 
issued or to be issued by a unit investment trust, 
offered in excess of one year, must be renewed by 



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626 



PROPOSED RULES 



payment of renewal fee of one hundred dollars 
($100.00) and by filing a sales report (form USR- 
]} of the amount of securities sold m this state to 
date and the balance of unsold securities 
effectively registered in this state expressed in 
dollars and units. TTie payment of the renewal fee 
and the sales report shall be made no earlier than 
30 days prior to the expiration date of the 
registration. Upon termination of the offering of 
a unit investment trust, the issuer shall file a final 
sales report of the aggregate amount of securities 
sold in this state, subject to the provisions of Rule 
.1315. 

Statutory Authority G.S. 78A-28(b); 78A-28(j); 
78A-49(a). 

.1305 SPONSORSfflP BY DEALER 

(a) Except where the conditions of G.S. 
78A-2(2)d.3. or 78A-2(2)d.4. are met, no 
securities will be considered for registration unless 
the application therefor is sponsored by a North 
Carolina registered dealer with a statement of its 
desire and intent to offer such securities to the 
investing public in North Carolina. Sponsorship of 
an issue by a North Carolina registered dealer may 
be accomplished by the dealer being listed on the 
application form (U-1) as a pplicant and signing the 
application form as applicant, or in lieu thereof, 
the sponsoring dealer may wire or write the 
administrator s tating with a statement proclaiming 
its intention to sponsor the issue in this State. The 
statement of sponsorehip will not be accepted from 
the dealer's attorney unless a power of attorney 
has been given to the attorney by the dealer and a 
copy of the power of attorney is submitted together 
with letter of sponsorship. 

(b) No issuer shall be permitted to qualify as a 
dealer for the purpose of offering its own 
securities pursuant to a registration in this State. 

£c} If an issuer is relying on G.S. 78A-2(2)d.3. 
then the issuer must submit in writing the names 
and titles of who is ofiFering and selling the 
securities in North Carolina. 

Statutory Authority G.S. 78A-2(2); 78A-49(a). 

.1310 OFFERING PRICE 

(a) A waiver of the two-day advance filing of 
the final offering price requirement of G.S. 
78A-26(c)(iii) will be permitted if the final pricing 
information is furnished to the administrator 
contemporaneously with notice of the Securities 
and Exchange Commission effectiveness. 

(b) The final offering price information shall be 



filed in the following format: 

Re: (Title of Offering) 

Date SEC effective: 

Total number of units/shares/interests: 

Total aggregate dollar amount: 

Initial public offering price: 

Underwriting commission (j)ercentage) : 

States in which registration has been withdrawn 

and the reason for the withdrawal. 

Statutory Authority G.S. 78A-26(c); 78A-49(a). 

,1313 REGISTRATION OF DPP, REIT, AND 
LLC SECURmES 

(a) As a condition to the registration of direct 
participation program, real estate investment trusts, 
and limited liability company securities, the issuer 
or dealer(s) effecting sales of such securities 
pursuant to such registration shall: 

(1) deliver to each offeree of the security in 
this State prior to any sale of the securi- 
ty to such offeree, a written statement 
of the investor suitability standards and 
minimum initial cash investment which 
each offeree must meet in order to 
purchase the security. The statement 
may be contained in any offering circu- 
lar, prosp)ectus or other written docu- 
ment delivered to the offeree; 

(2) determine, prior to the sale of the 
security to each person in this State, 
that the person meets the investor suit- 
ability standards applicable to the secu- 
rity. For purposes of this determina- 
tion, the issuer or dea]er(s) shall be 
entitled to rely conclusively upon a 
written statement or questionnaire 
signed by the person and received in 
good feith and without knowledge that 
the information stated therein is inaccu- 
rate; 

(3) require that the minimum initial cash 
investment by each purchaser of such 
securities in this state be five thousand 
dollars ($5,000) except that no mini- 
mum investment shall be required for 
tax qualified plans. 

(b) The minimum investor suitability standards 
which shall be imposed for registered offerings of 
direct participation program securities are as 
follows: 

(1) The investor shall either have a mini- 
mum net worth of two hundred 
twenty-five thousand dollars ($225, (XX)) 
or a minimum net worth of sixty 



627 



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PROPOSED RULES 



thousand dollars ($60,000) and had 
during the last tax year or estimates that 
the investor will have during the 
current tax year, taxable income of at 
least sixty thousand dollars ($60,000) 
without regard to the investment in the 
security. 
(2) Net worth shall be determined exclusive 
of principal residence, mortgage 
thereon, home furnishings and 
automobiles. In the case of sales to 
fiduciary accounts, the investor 
suitability standards shall be met by the 
fiduciary or the fiduciary account or by 
the donor who directly or indirectly 
supplies the funds to purchase the 
securities. 

(c) The administrator will permit the substitution 
of lower suitability standards and a minimum 
initial cash investment of not less than two 
thousand five hundred dollars ($2,500), if such 
lower standards are consistent with the standards 
outlined in the NASAA policy statement for that 
specific type of program. (See CCH NASAA 
Reports for such policy statements.) 

(d) The administrator may modify or waive, 
ujKjn the showing of good cause, the requirements 
of Paragraphs (a), (b) and (c) of this Rule, in 
whole or in part, with respect to a particular 
security, offering or transaction or the 
administrator may require higher investor 
suitability standards and minimum investment 
requirements with respect to a particular security 
offering or transaction where necessary for the 
protection of investors. 

Statutory Authority G.S. 78A-49(a). 

.1314 ESCROW AGREEMENTS 

Where, as a condition to registration of a 
security in North Carolina, an escrow agreement 
is required, such agreement shall provide that all 
funds shall be returned immediately to the 
investors in full, without reduction of any fees, 
commissions or expenses unless a specified dollar 
amount of offering proceeds are received by the 
escrow agent within a specified period. The time 
period specified in any escrow agreement may be 
extended for a time certain if agreed upon by all 
persons who have theretofore contracted to 
purchase the security. The escrow agent shall be 
a federal bank regulated by the Comptroller of the 
Currency or a state bank regulated by the 
appropriate state authority. Other depositories 
may be approved by the administrator on a case by 



case basis. The provisions of the NASAA 
"Statement of Policy Regarding the Impoundment 
of Proceeds", as found at CCH NASAA Reports 
2151 et seq. (as may be amended from time to 
time), are incorporated herein by reference. 
Where an escrow agreement is required as a 
condition of registration of a security in North 
Carolina, the NASAA Model Security Escrow 
Agreement, as found at CCH NASAA Reports 
1651, may be used to satisfy such requirement. If 
it is an interest-bearing account, investors must be 
entitled to receive the interest accrued or paid on 
the escrowed funds. 

Statutory Authority G.S 78A-28(g); 78A-49(a). 

SECTION .1400 - REGISTRATION 
OF DEALERS AND SALESMEN 

.1401 APPLICATION FOR 

REGISTRATION OF DEALERS 

(a) The application for registration as a dealer 
shall contain the following: 

(1) an executed Uniform Application for 
Registration as a Dealer (Form BD) and 
the appropriate schedules thereto or the 
appropriate successor form; 

(2) a fee in the amount of two hundred 
dollars ($200.00); 

(3) evidence of current registration as a 
dealer with the Securities and Exchange 
Commission under the Securities Ex- 
change Act of 1934; 

(4) evidence of net capital as defined by 
Rule .1410(e) of this Section greater 
than one hundred thousand dollars 
($100,(XX)) or evidence of compliance 
with Rule .1410 of this Section; 

(5) a separate document listing the names 
of any dealers acquired by or affiliated 
with the applicant dealer, as well as any 
prior names of the a pplicant dealer or 
any of the acquired or affiliated dealers: 

(6) f5) any other information the adminis- 
trator may from time to time require. 

(b) The application for registration as a dealer 
shall be filed as follows: 

(1) NASD member dealers shall file appli- 
cations for initial registration in the 
State of North Carolina with the 
NASAA/NASD Central Registration 
Depository, P.O. Box 37441, 
Washington, D.C. 20013 and shall file 
a manually executed Form BD directly 
with the Securities Division. 



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628 



PROPOSED RULES 



Applications for renewal of registration 
shall be filed only with the Central 
Registration Depository (see Rule .1406 
of this Section); 
(2) Non-NASD member dealers shall file 
all applications for registration in the 
State of North Carolina directly with 
the Securities Division. 

(c) The dealer shall file with the administrator, 
as soon as practicable but in no event later than 
thirty days, notice of any disciplinary action taken 
against the dealer by any exchange of which the 
dealer is a member; the Securities and Exchange 
Commission; the Commodity Futures Trading 
Commission; any national securities association 
registered with the Securities and Exchange 
Commission pursuant to Section 15A of the 
Securities Exchange Act of 1934 or any state 
securities commission and of any civil suit filed 
against the dealer alleging violation of any federal 
or state securities laws. If the information 
contained in any document filed with the 
administrator is or becomes inaccurate or 
incomplete in any material resf)ect, the dealer shall 
file a correcting amendment as soon as practicable 
but in no event later than thirty days. 

(d) Registration becomes eff"ective at noon of the 
30th day after a completed application is filed or 
such earlier time upon issuance of a license or 
written notice of effective registration, unless 
proceedings are instituted pursuant to G.S. 
78A-39. The administrator may by order defer the 
effective date after the filing of any amendment but 
no later than noon of the 30th day after the filing 
of the amendment. 

(e) Every dealer shall notify the administrator of 
any change of address, the of)ening or closing of 
any office (including the office of any salesman 
operating apart from the dealer's premises) or any 
material change thereto, in writing as soon as 
practicable or by filing concurrently upon filing 
with NASD an appropriate amendment or schedule 
to Form BD or any successor form. 

(f) Every dealer shall notify the Administrator 
of each branch office in the state and shall pay an 
annual fee of twenty -five dollars ($25.00) per 
branch. This fee is payable to the Central 
Registration Depository. With respect to each 
branch, the following information shall be filed 
with the Administrator: address, branch manager, 
telephone number, and an "eight-hundied" number 
if the branch has such a number. Each branch 
office shall maintain at all times a supervisory 
procedure manual available for inspection. The 
supervisor of each branch office must have a series 



24 NASD license as well as the other licenses 
required by a pplicable statutes and rules. 

(g) Each dealer prior to initial registration as a 
dealer must make a statement that such dealer has 
effected no sales of securities in the state of North 
Carolina or must provide proof of compliance with 
the 15 transaction exclusion from dealer status rule 
as provided by G. S. 78A-2(2)cl. 

Statutory Authority G.S. 78A-36(a); 78A-37(a); 
78A-37(b); 78A-37(d); 78A-38(c); 78A-49(a). 

.1402 APPLICATION FOR 

REGISTRATION OF SALESMEN 

(a) The application for registration as a salesman 
shall contain the following: 

(1) an executed Uniform Application for 
Securities and Commodities Industry 
Representative and/or Agent (Form 
U-4) or the appropriate successor form; 

(2) a fee in the amount of fifty-five dollars 
($55.00); 

(3) evidence of a passing grade of seventy 
percent on the Uniform Securities 
Agent State Law Examination 
(USASLE - Series 63) as weU as the 
a ppropriate NASD license as required 
by Rule .1413 of this Section. 

(b) The application for registration as a salesman 
shall be filed as follows: 

(1) NASD member dealers shall file aU 
salesman applications for registration in 
the State of North Carolina with the 
NASAA/NASD Central Registration 
Depository, P.O. Box 37441, 
Washington, D.C. 20013; 

(2) Non-NASD member dealers shall file 
all salesman applications for registration 
in the State of North Carolina directly 
with the Securities Division. 

(c) The salesman or the dealer for which the 
salesman is registered shall file with the 
administrator, as soon as practicable but in no 
event later than 30 days, notice of any disciplinary 
action taken against a salesman by any exchange of 
which the dealer is a member; the Securities and 
Exchange Commission; the Commodity Futures 
Trading Commission; any national securities 
association registered with the Securities and 
Exchange Commission pursuant to Section 15A of 
the Securities Exchange Act of 1934 or any state 
securities commission and of any civil suit^ 
warrant, criminal warrant, or criminal indictment 



filed against the salesman alleging violation of any 
federal or state securities laws. If the information 



629 



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PROPOSED RULES 



contained in any document filed with the 
administrator is or becomes inaccurate or 
incomplete in any material respect, the salesman or 
the dealer for which the salesman is registered 
shall file a correcting amendment as soon as 
practicable but in no event later than thirty days. 
Such filing is to be made by NASD member 
dealers and their salesmen to the NASAA/NASD 
Central Registration Depository and non-NASD 
member dealers and their salesmen shall make 
such filing directly with the Securities Division. 

(d) Registration becomes efl'ective at noon of the 
30th day after a completed application is filed or 
such earlier time upon approval of the application 
by the administrator, unless proceedings are 
instituted pursuant to G.S. 78A-39. The 
administrator may by order defer the efl'ective date 
after the filing of any amendment but no later than 
noon of the 30th day after the filing of the 
amendment. 

(e) A salesman shall only be registered in this 
State with one dealer. 

Statutory Authority G.S. 78A-37(a); 78A-37(b): 
78A-38(c); 78A-39(b)(4}; 78A-49(a). 

.1405 DEALER MERGER/ 
CONSOLIDATION/ 
ACQUISITION/SUCCESSION 

(a) When there is a merger, consolidation, 
acquisition, succession, or other fundamental 
change the surviving or new entity shall file with 
the administrator, prior to such fundamental 
change, an amended Form BD or successor form, 
with the plan of fundamental change and a letter or 
any documents of explanation including the date of 
mass transfer of salesmen pursuant to Paragraph 
(c) of this Rule if contemplated. As soon as 
practicable, but not later than 30 days after the 
fundamental change, the surviving or new entity 
shall file with the administrator the current 
financial statements of the surviving or new entity; 
the amended or new charter and by-laws; and, if 
applicable, a copy of the certificate of merger, 
consolidation or other fundamental change. 

(b) The registration of the surviving or new 
entity usually will be granted by the administrator 
on the same date that the fundamental change 
becomes eflFective. Where the fundamental change 
results in a change in the name of the surviving or 
new entity from the name listed on any outstanding 
dealer's license, the license shall be returned and 
a new license reflecting the new name will be 
issued. There will be no fee for reissuance of a 
license. 



(c) Dealers shall efl'ect mass transfers of 
salesmen in the following manner: 

(1) Where the surviving or new entity is a 
NASD member firm, it shall follow the 
NASAA/NASD Central Registration 
Depository procedures for effecting a 
mass transfer of salesmen from the 
nonsurviving entity to the surviving or 
new entity. For any salesman not to be 
transferred, the surviving or new entity 
shall timely terminate registration of 
that salesman pursuant to the 
NASAA/NASD Central Registration 
Depository procedures. There will be 
no fee for these transfers. 

(2) Where the surviving or new entity is a 
non-NASD member firm, it shall file 
with the Securities Division a Form U-4 
or successor form for each salesman to 
be transferred from the nonsurviving 
entity to the surviving or new entity and 
a Form U-5 or successor form for each 
salesman not to be transferred. Each 
transferred salesman shall retain his 
salesman's license or notice of 
registration which shall suffice as 
evidence of registration with the 
surviving or new entity until renewal. 
The transfer of the salesman is effective 
upon receipt of the Form U-4 or 
successor form by the Securities 
Division. All Form U-5's or successor 
forms shall be filed as soon as 
practicable but no later than 10 business 
days after the fundamental change. 
There will be no fee for these tmnsfcre. 
A regular application fee shall be paid 
by the surviving or new dealer for each 
agent in such transfer. 

Statutory Authority G.S 78A-37(b); 78A-37(c); 
78A-40(a); 78A-49(a). 

.1407 EXPIRATION AND RENEWAL 

OF SALESMAN'S REGISTRATION 

A salesman's registration shall expire on 
December 31 of each year unless renewed. A 
dealer shall file the following at least 15 days 
before the expiration date to renew its salesmen's 
registration: 

(1) Dealers that are NASD member firms 
shall renew all salesmen by complying 
with the procedures for renewal of 
salesmen as required by the 
NAS/VA/NASD Central Registration 



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630 



PROPOSED RULES 



Depository along with the payment of 
forty fiw dolloTB ($ 4 5.00) fifty-five 
dollars ($55.00) for each salesman 
made payable to the National 
Association of Securities Dealers. 
(2) Dealers that are non-NASD member 
firms shall renew all salesmen by filing 
with the Securities Division a listing of 
all salesmen to be renewed along with 
their current addresses and social 
security numbers. The salesman 
renewal list shall be submitted in 
alphabetical order as follows: last 
name, first name, middle name or 
maiden name; current address; social 
security number. A fee of forty five 
dollar s — ($ 4 5.00) fifty-five dollars 
($55.00) for each salesman made 
payable to the North Carolina Secretary 
of State shall be submitted along with 
the salesman renewal list. 

Statutory Authority G.S. 78A-36(c); 78A-37(a): 
78A-37(b); 78A-40(a); 78A-49(a). 

.1409 TRANSFER OF SALESMAN'S 
REGISTRATION 

(a) In order to effect a transfer of registration of 
a salesman from one registered dealer (the 
"previous dealer") to another registered dealer (the 
"new dealer"), the administrator shall be provided 
the following information: 

(1) Within ten days. a Uniform 
Termination Notice for Securities 
Industry Registration (Form U-5) is to 
be provided by the previous dealer 
pursuant to the requirements of Rule 
.1408 of this Section; 

(2) Uniform Application for Securities and 
Commodities Industry Representative 
(Form U-4) is to be provided by the 
new dealer, accompanied by a fee of 
forty five dollora ($ 4 5.00) fifty-five 
dollars ($55.00) for issuance of the new 
registration, pursuant to the 
requirements of Rule .1402 of this 
Section. 

(b) Every registration of a salesman expires 
when the employment of the salesman terminates 
until that salesman's registration with a new dealer 
has been approved. 

Statutory Authority G.S. 78A-36(b); 78A-49(a). 

.1412 FINANCIAL STATEMENTS 



The administrator may require any dealer, either 
registered or making application, to file any and 
all fineincial statements which such dealer files with 
the Securities and Exchange Commission or any 
national securities exchange or national securities 
association of which it is a member. Each broker- 
dealer is required to furnish the administrator with 
a copy of its audited financial statements 60 days 
after its fiscal year ends. 

Statutory Authonty G.S 78A-38(b); 78A-49(c). 

.1413 SALESMAN EXAMINATION 
REQUIRED 

(a) Every application for registration as a 
salesman shall show evidence of a minimum 
passing grade of seventy percent on the Uniform 
Securities Agent State Law Examination (USASLE 
- Series 63). The USASLE - Series 63 
examination is given by the National Association 
of Securities Dealers (NASD). Each a pplication 
for registration must also show that the applicant 
has passed the a ppropriate NASD exam. The 
scheduled dates, times and locations may be 
obtained by contacting the NASD, 1735 K Street 
Northwest, Washington, D.C. (202) 728-8800 or 
the Securities Division. 

(b) The requirement of Paragraph (a) of this 
Rule shall not apply to any salesman who has been 
registered continuously since April 1, 1981; 
provided that a lapse in registration in this State of 
less than one year shall not require compliance 
with Paragraph (a). New registrants after April 1, 
1981, who have not been registered previously in 
this State and previously registered salesmen in 
this State whose registration has lapsed for one 
year or more shall comply with Paragraph (a) of 
this Rule. 

(c) The administrator may, upon just cause 
shown in writing, waive the requirements of 
Paragraph (a) of this Rule. However, the 
administrator generally will not honor such 
requests absent a showing of undue hardship. 

(d) Termination of the salesman's registration 
with the NASD shall automatically terminate the 
salesman's registration with the State of North 
Carolina. 

Statutory Authority G.S. 78A-39(b)(4); 78A-49(a). 

.1416 REPORTING REQUIREMENTS 
OF DEALERS AND 
SALESMEN 

(a) All bankruptcies of dealers and/or salesmen 
registered with the Securities Division must be 



631 



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August 1, 1994 



PROPOSED RULES 



reported to the administrator within 30 (thirty) 
days after the filing of the petition for bankruptcy. 

(b) All arbitrations involving dealers and/or 
salesmen registered with the Securities Division 
must be reported to the administrator within 30 
(thirty) days of the conclusion of the proceeding. 
Such report must include the terms of the 
settlement. 

(c) Any fundamental alterations in the structure 
or operation of the dealer must be reported to the 
administrator within 30 days. For a period of 60 
days following such notification, the administrator 
shall reserve the right to review the dealer's 
registration in light of the alterations reported. 
For the purposes of this Rule .1416, "fundamental 
alteration" is defined as any of the following: 

(1) the opening or closing of any office, 
including the office of any salesperson 
operating apart from the dealer's 
premises, 

(2) any merger, consolidation, acquisition, 
or succession participated in by the 
dealer, or 

(3) the replacement of any partner, 
executive officer, director, or any 
person occupying a similar status or 
performing similar functions, as well as 
any significant changes in the duties or 
responsibilities assigned to any such 
position. 

Statutory Authority G.S. 78A-38(a); 78A-38(d); 
78A-38(c); 78A-49(a). 

SECTION .1700 - REGISTRATION OF 

INVESTMENT ADVISERS AND 

INVESTMENT ADVISER 

REPRESENTATIVES 

.1702 APPLICATION FOR INVESTMENT 
ADVISER REGISTRATION 

(a) The application for initial registration as an 
investment adviser pursuant to Section 78C- 17(a) 
of the Act shall be filed upon Form ADV 
(Uniform Application for Investment Adviser 
Registration) (17 C.FR. 279.1) with the 
administrator. The initial application shall include 
the consent to service of process required by 
Section 78C-46(b) of the Act, and shall include the 
following: 

(1) A statement or certificate showing 
compliance by the investment adviser 
with the examination requirements of 
Rule .1709; 

(2) Such financial statements as set forth in 



Rule .1708, including at the time of 
application, a copy of the balance sheet 
for the last fiscal year, and if such 
balance sheet is as of a date more than 
45 days from the date of filing of the 
application, an unaudited balance sheet 
prepared as set forth in Rule .1708 as 
of a date within 45 days of the date of 
filing; 

(3) Evidence of compliance with the 
minimum financial requirements of 
Rule .1704; 

(4) A copy of the surety bond required by 
Section 78C- 17(e), if applicable; 

(5) The fee required by Section 78C- 17(b) 
of the Act; and 

(6) Any other information the administrator 
may from time to time require. 

(b) Tlie application for renewal of registration as 
an investment adviser shall be filed on Form 
ADV-S (Annual Report for Investment Advisers 
Registered Under the Investment Advisers Act of 
1940) (17 C.FR. 279.3) and shall contain the 
following: 

(1) A copy of the surety bond required by 
Rule .1705, if applicable; aad 

(2) The fee requited by Section 78C- 17(b) 
of the Actri and 

(3) A copy of the fee schedule currently 
used by the investment adviser. 

(c) The investment adviser shall file with the 
administrator, as soon as practicable but in no 
event later than 30 days, notice of any civil, 
criminal or administrative charges filed against the 
investment adviser which relate directly or 
indirectly to its activities in the securities or 
financial services business. This notice shall 
include notification of any investigation by any 
securities, commodities, or other financial services 
regulatory agency and any disciplinary, injunctive, 
restraining, or limiting action taken by such 
agencies, by any court of competent jurisdiction, 
or by any state administrator with respect to the 
mvestment adviser's activities in the securities or 
financial services business. Any amendment 
required by Section 78C- 18(d) of the Act for an 
investment adviser shall be made on Form ADV in 
the manner prescribed by that form. Any 
amendment to Form ADV shall be filed with the 
administrator within the time period specified in 
the instructions to that form relating to filings 
made with the Securities and Exchange 
Commission. 

(d) Registration becomes effective at noon of the 
30th day after a completed application is filed or 



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632 



PROPOSED RULES 



such earlier time up>on issuance of a license or 
written notice of effective registration, unless 
proceedings are instituted pursuant to G.S. 
78C-19. The administrator may by order defer the 
effective date after the filing of any amendment but 
no later than noon of the 30th day after the filing 
of the amendment. 

(e) Every investment adviser shall notify the 
administrator of any change of address, the 
of>emng or closing of any office (including the 
office of any investment adviser representative 
operating apart from the investment adviser's 
premises) or any material change thereto, in 
writing as soon as practicabler^^ but no later than 
30 days after the change. 

(f) The registration of an investment adviser 
shall expire on December 31 of each year unless 
timely renewed. The application for renewal of 
registration should be filed at least 15 days before 
the expiration date. 

Statutory Authority G.S. 78C- 16(b); 78C-17(a); 

78C-17(b); 78C-17(e); 78C-18(d); 78C-19(a); 

78C-30(a); 78C-30(b); 78C-30(c); 78C-30(d): 
78C-46(i). 

.1704 MINIMUM FINANCIAL 
REQUIREMENTS FOR 
INVESTMENT ADVISERS 

(a) Unless an investment adviser posts a bond 
pursuant to Rule .1705, an investment adviser 
registered or required to be registered under the 
Act who has custody of client funds or securities 
shall maintain at all times a minimum net worth of 
thirty-five thousand dollars ($35,000.00), and 
every investment adviser registered or required to 
be registered under the Act who has discretionary 
authority over client funds or securities but does 
not have custody of client funds or securities shall 
maintain at all times a minimum net worth of ten 
thousand dollars ($10,000.00). 

(b) Unless otherwise exempted, as a condition of 
the right to continue to transact business in this 
state, every investment adviser registered or 
required to be registered under the Act shall by the 
close of business on the next business day notify 
the administrator if such investment adviser's total 
net worth is less than the minimum required. 
After transmitting such notice, each investment 
adviser shall file by the close of business on the 
next business day a written report with the 
administrator of its financial condition, including 
the following: 

(1) A trial balance of all ledger accounts; 

(2) A statement of all client funds or 



securities which are not segregated; 

(3) A computation of the aggregate amount 
of client ledger debit balances; and 

(4) A statement as to the number of client 
accounts. 

(c) For purposes of this Rule, the term "net 
worth" shall mean an excess of assets over 
liabilities, as determined by generally accepted 
accounting principles, but shall not include as 
assets: prepaid expenses (except as to items 
prop>erly classified as current assets under 
generally accepted accounting principles), deferred 
charges, subordinated loans, goodwill, franchise 
rights, organizational expenses, patents, 
copyrights, marketing rights, unamortized debt 
discount and expense, all other assets of intangible 
nature; home, home furnishings, automobile(s), 
and any other f)ersonal items not readily 
marketable in the case of an individual; advances 
or loans to stockholders and officers in the case of 
a corporation; and advances or loans to partners in 
the case of a partnership. 

(d) The administrator may require that a current 
appraisal be submitted in order to establish the 
worth of any asset. 

Statutory Authority G.S 78C- 17(d); 78C-18(c); 
78C- 18(d); 78C-30(a). 

.1713 INVEST ADVISER MERGER/ 
CONSOLIDATION/ 
ACQUISmON/SUCCESSION 

(a) When there is a merger, consolidation, 
acquisition, succession, or other similar 
fundamental change in the ownership of a 
registered investment adviser, the surviving or new 
entity shall file with the administrator, prior to 
such fundamental change, an amended Form ADV 
or ADV-S or successor form, with the plan of 
fundamental change and a letter or any documents 
of explanation including the date of mass transfer 
of investment adviser representatives pursuant to 
Paragraph (c) of this Rule if contemplated. As 
soon as practicable, but not later than 30 days after 
the fundamental change, the surviving or new 
entity shall file with the administrator the current 
financial statements of the surviving or new entity; 
the amended or new charter and by-laws; and, if 
applicable, a copy of the certificate of merger, 
consolidation or other fundamental change. 

(b) The registration of the surviving or new 
entity usually will be granted by the administrator 
on the same date that the fundamental change 
becomes effective. Where the fundamental change 
results in a change in the name of the surviving or 



633 



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August I, 1994 



PROPOSED RULES 



new entity from the name listed on any outstanding 
investment adviser's license, the license shall be 
returned and a new license reflecting the new 
name will be issued. There will be no fee for 
reissuance of a license. 

(c) Investment advisers shall effect mass trans- 
fers of investment adviser representatives by filing 
with the Securities Division a Form U-4 or succes- 
sor form for each investment adviser representative 
to be transferred from the nonsurviving entity to 
the surviving or new entity and a Form U-5 or 
successor form for each investment adviser repre- 
sentative not to be transferred. Each transferred 
investment adviser representative shall retain his 
investment adviser representative's license which 
shall suffice as evidence of registration with the 
surviving or new entity until renewal. The trans- 
fer of the investment adviser representative is 
effective upon receipt of the Form U-4 or succes- 
sor form by the Securities Division. All Form 
U-5's or successor forms shall be filed as soon as 
practicable but no later than ten business days after 
the fundamental change. There will be no fee for 
those transfers. A regular a pplication fee shall be 
paid by the surviving or new investment adviser 
for each investment adviser in such transfer. 

Statutory Authority G.S. 78C-16(b); 78C-17(a); 
78C-17(c); 78C-18(b); 78C-18(c); 78C-18(d); 
78C-30(a); 78C-30(b). 

SECTION .1900 - REGISTRATION 
OF ATHLETE AGENTS 

.1901 APPLICATION FOR 

REGISTRATION OF ATHLETE 
AGENTS 

(a) Each applicant for registration as an athlete 
agent shall complete the "North Carolina Athlete 
Agent Registration Application" (Form NCAAl). 
Appended to such form shall be one of the follow- 
ing disclosure documents: 

(1) The National Basketball Players 
Association's "Application for Certifi- 
cation as an NBPA Player Agent"; 

(2) The National Football League Players 
Association's "Application for NFLPA 
Member Contract Adviser"; 

(3) The Major League Baseball Players 
Association's "MLBPA Player Agent 
Certification Statement"; 

(4) The North Carolina Disclosure Form 
(Form NCAA3); or 

(5) Any other disclosure document which 
has been approved by the Secretary of 



State, 
(b) A check in the amount of two hundred 
dollars ($200.00), The registration fee for all 
applications filed between January i and June 30 
will be two hundred dollars ($200.00). The 
registration fee for all a pplications filed after June 
30 will be one hundred dollars ($100.00). Checks 
for registration fees shall be made payable to 
"Secretary of State", and shall be transmitted with 
the application for registration, along with a 
completed Form NCAA4 ("Athlete Agent Consent 
to Service of Process"). Registration becomes 
effective on the date of issuance of a certificate of 
registration to the applicant. 



Statutory Authority 
78C-81. 



G.S. 78C-46(b); 78C-72; 



.1902 EXPIRATION OF REGISTRATION 

Registration as an athlete agent i s for a period of 
one year and shall automatically expire ©ae on 
December 3 1 of the current year from the date of 



issuance of the original certificate of registration , 
unless renewed by the applicant in compliance 
with Rule .1903. 



Statutory Authority G.S. 78C-72; 78C-81. 

.1903 REr^WAL OF REGISTRATION 

(a) A completed application for renewal of an 
effective registration as an athlete agent must be 
received by the Office of the Secretary of State at 
least 30 days but not more than 60 day s prior to 
the expiration of a currently effective registration. 
between October 1 and November 30 of the 
current year. 

(b) Each applicant for renewal of registration as 
an athlete agent shall complete and submit a Form 
NCAAl ("North Carolina Athlete Agent Registra- 
tion Application") along with a filing fee of two 
hundred dollars ($2{X).00) in the form of a check 
made payable to "Secretary of State". It is not 
necessary to file Form NCAA4 ("Athlete Agent 
Consent to Service of Process") with an applica- 
tion for renewal of registration as an athlete agent. 

Statutory Authority G.S. 78C-46; 78C-72; 78C-81. 



9:9 



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August 1, 1994 



634 



LIST OF RULES CODIFIED 










1 he List of Rules Codified is a listing of rules that were filed with OAH in the month indicated. 

J\ey: 

Citation = Title. Chapter, Subchapter and Rule(s) 

AD = Adopt 

AM = Amend 

RP = Repeal 

With Chgs = Final text differs from proposed text 

Corr = Typographical errors or changes that requires no rulemaking 

Eff. Date = Date rule becomes effective 

Temp. Expires = Rule was filed as a temporary rule and expires on this date or 180 days 


NORTH CAROLINA ADNHNISTRATTVE CODE 
JUNE 94 

TITLE DEPARTMENT TITLE DEPARTMENT 

10 Human Resources 21 Occupational Licensing Boards 

1 1 Insurance 36 - Nursing 

12 Justice 46 - Pharmacy 

1 3 Labor 50 - Plumbing & Heating Contractors 
15A Environment, Health, and 53 - Practicing Counselors 

Natural Resources 54 - Practicing Psychologists 
17 Revenue 23 Community Colleges 
19A Transportation 24 Independent Agencies 

5 - State Health Plan Purchasing Alliance Board 
25 State Personnel 


Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


10 NCAC IK .0306 










/ 






3E .0101 




/ 




/ 




07/01/94 




.0106 - .0107 




/ 








07/01/94 




.0111 




/ 




/ 




07/01/94 




.0201 




/ 




/ 




07/01/94 




.0202 




/ 








07/01/94 




.0204 - .0205 




/ 








07/01/94 




.0206 




/ 




/ 




07/01/94 




.0303 




/ 




/ 




07/01/94 




.0304 




/ 








07/01/94 




1 


635 9:9 N 


ORTH 


CAROL. 


INARE 


GISTEl 


e 


Au 


gust 1, 1994 1 



UST OF RULES CODIFIED 





Citation 


AD 


AM 


RP 


Witli 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


10 NCAC 3E .0305 - .0306 




/ 




/ 




07/01/94 




.0309- .0311 




/ 








07/01/94 




3R .3020 




/ 








06/07/94 


180 DAYS 


.3030 




/ 








06/07/94 


180 DAYS 


.3030 




/ 








07/01/94 


180 DAYS 


.4201 - .4204 


/ 






/ 




07/01/94 




.4205 


/ 










07/01/94 




.4206 


/ 






/ 




07/01/94 




.4207 


/ 










07/01/94 




3U .0712 - .0713 




/ 




/ 




07/01/94 




.2607 




/ 




/ 




07/01/94 




14C .0716 




/ 








07/01/94 




.1148 


/ 






/ 




07/01/94 




14J .0206 




/ 




/ 




07/01/94 




.0210 




/ 




/ 




07/01/94 




14K .0103 




/ 




/ 




07/01/94 




16A .0401 


/ 










07/01/94 




.0402 - .0403 


/ 






/ 




07/01/94 




18J .0119 


/ 










07/01/94 




.0801 - .0805 


/ 










07/01/94 




18M .0906 




/ 








07/01/94 




45G .0139 


/ 






/ 




07/01/94 




.0406 




/ 




/ 




07/01/94 




11 NCAC 13 .0518 


/ 










07/01/94 




18 .0019 -.0020 


/ 










07/01/94 




.0021 


/ 






/ 




07/01/94 




12 NCAC 7D .1101 


/ 






/ 




07/01/94 




.1102- .1103 


/ 










07/01/94 




.1104 


/ 






/ 




07/01/94 




.1105 - .1106 


/ 










07/01/94 




.1107 


/ 






/ 




07/01/94 




.1108- .1110 


/ 










07/01/94 




13 NCAC 7F .0101 




/ 








09/01/94 







9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



636 



LIST OF RULES CODIFIED 










Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


15A NCAC IJ .0102 




/ 








07/01/94 




.0201 




/ 








07/01/94 




.0303 




/ 




/ 




07/01/94 




.0304 




/ 








07/01/94 




.0402 




/ 








07/01/94 




.0501 






/ 






07/01/94 




.0502 - .0503 




/ 




/ 




07/01/94 




.0505 




/ 








07/01/94 




.0602 




/ 








07/01/94 




.0603 




/ 




/ 




07/01/94 




.0605 






/ 






07/01/94 




.0606 




/ 








07/01/94 




.0702 - .0703 




/ 




/ 




07/01/94 




.0802 - .0803 




/ 




/ 




07/01/94 




.0901 




/ 








07/01/94 




.0904 




/ 




/ 




07/01/94 




.0905 






/ 






07/01/94 




.1002 




/ 




/ 




07/01/94 




.1101 




/ 








07/01/94 




IL .0101 


/ 










07/01/94 




.0102 


/ 






/ 




07/01/94 




.0201 - .0203 


/ 










07/01/94 




.0301 


/ 










07/01/94 




.0302 - .0303 


/ 






/ 




07/01/94 




.0401 


/ 










07/01/94 




.0501 - .0502 


/ 






/ 




07/01/94 




.0503 - .0504 


/ 










07/01/94 




.0601 - .0603 


/ 






/ 




07/01/94 




.0604 


/ 










07/01/94 




.0605 


/ 






/ 




07/01/94 




.0701 


/ 






/ 




07/01/94 




.0702 


/ 










07/01/94 




.0703 


/ 






/ 




07/01/94 







637 



9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



LIST OF RULES CODIFIED 



Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


15A NCAC IL .0801 


/ 










07/01/94 




.0901 


/ 










07/01/94 




.0902 


/ 






/ 




07/01/94 




.1001 - .1003 


/ 










07/01/94 




.1004 


/ 






/ 




07/01/94 




.1101 


/ 










07/01/94 




.1201 - .1202 


/ 










07/01/94 




2D .0101 




/ 




/ 




07/01/94 




.0501 




/ 




/ 




07/01/94 




.0503 




/ 








07/01/94 




.0524 - .0525 




/ 




/ 




07/01/94 




.0530 




/ 




/ 




07/01/94 




.0531 - .0533 




/ 








07/01/94 




.0601 




/ 








07/01/94 




.0801 




/ 








07/01/94 




.0802 




/ 




/ 




07/01/94 




.0803 




/ 








07/01/94 




.0804 




/ 




/ 




07/01/94 




.0805 


/ 






/ 




07/01/94 




.0806 


/ 










07/01/94 




.0902 




/ 




/ 




07/01/94 




.0907 




/ 




/ 




07/01/94 




.0909 




/ 








07/01/94 




.0927 - .0928 




/ 




/ 




07/01/94 




.0932 - .0933 




/ 




/ 




07/01/94 




.0952 




/ 








07/01/94 




.0953 - .0954 


/ 






/ 




07/01/94 




.1002 




/ 








07/01/94 




.1109 


/ 










07/01/94 




2H .0601 - .0607 






/ 






07/01/94 




.0609 






/ 






01/01/95 




2Q .0101 


/ 










07/01/94 




.0102 - .0103 


/ 






/ 




07/01/94 







9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



638 



LIST OF RULES CODIFIED 





Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


15A NCAC 2Q .0104 


/ 










07/01/94 




.0105 


/ 






/ 




07/01/94 




.0106 


/ 










07/01/94 




,0107 


/ 






/ 




07/01/94 




.0108 


/ 










07/01/94 




.0109 


/ 






/ 




07/01/94 




.0110- .0111 


/ 










07/01/94 




.0201 - .0203 


/ 






/ 




07/01/94 




.0204 - .0205 


/ 










07/01/94 




.0206 


/ 






/ 




07/01/94 




.0207 


/ 










07/01/94 




.0301 - .0303 


/ 










07/01/94 




.0304 


/ 






/ 




07/01/94 




.0305 


/ 










07/01/94 




.0306 


/ 






/ 




07/01/94 




.0307- .0311 


/ 










07/01/94 




.0401 - .0415 


/ 










07/01/94 




.0416 


/ 






/ 




07/01/94 




.0417 - .0418 


/ 










07/01/94 




.0501 - .0502 


/ 










07/01/94 




.0503 


/ 






/ 




07/01/94 




.0504 - .0506 


/ 










07/01/94 




.0507 - .0508 


/ 






/ 




07/01/94 




.0509 - .0515 


/ 










07/01/94 




.0516 


/ 






/ 




07/01/94 




.0517 - .0524 


/ 










07/01/94 




,0601 - .0606 


/ 










07/01/94 




7H .1104 




/ 




/ 




07/01/94 




.1204 




/ 




/ 




07/01/94 




.1304 




/ 




/ 




07/01/94 




.1404 




/ 




/ 




07/01/94 




.1504 




/ 




/ 




07/01/94 




.1604 




/ 




/ 




07/01/94 







639 



9:9 



NORTH CAROUNA REGISTER 



August 1, 1994 



LIST OF RULES CODIFIED 










Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


15A NCAC 7H .1704 




/ 




/ 




07/01/94 




.1804 




/ 




/ 




07/01/94 




.1904 




/ 




/ 




07/01/94 




.2104 


/ 






/ 




07/01/94 




lOB .0113 




/ 








07/01/94 




lOD .0002 - .0003 




/ 




/ 




07/01/94 




lOF .0305 




/ 




/ 




07/01/94 




.0333 




/ 








07/01/94 




lOH .0101 




/ 




/ 




07/01/94 




.0813 




/ 








07/01/94 




18A .2601 




/ 




/ 




07/01/94 




.2610 




/ 




/ 




07/01/94 




.2645 


/ 






/ 




07/01/94 




18C .0102 




/ 




/ 




07/01/94 




.0201 - .0203 




/ 




/ 




07/01/94 




.0301 




/ 








07/01/94 




.0302 - .0303 




/ 




/ 




07/01/94 




.0305 




/ 








07/01/94 




.0307 




/ 




/ 




07/01/94 




.0308 




• 








07/01/94 




.0401 




/ 








07/01/94 




.0402 - .0405 




/ 




/ 




07/01/94 




.0407 




/ 








07/01/94 




.0409 


/ 










07/01/94 




.0501 - .0502 




/ 








07/01/94 




.0703 




/ 




/ 




07/01/94 




.0707 - .0708 




/ 




/ 




07/01/94 




.0710 - .0712 


/ 






/ 




07/01/94 




.0713 


/ 










07/01/94 




.0714 - .0715 


/ 






/ 




07/01/94 




.0802 - .0803 




/ 




/ 




07/01/94 




.0804 




/ 








07/01/94 




.0805 




/ 




/ 




07/01/94 







9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



640 



LIST OF RULES CODIFIED 








1 


Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


15A NCAC 18C .1002 




/ 




/ 




07/01/94 




.1004 




/ 




/ 




07/01/94 




.1101 




/ 








07/01/94 




.1102 




/ 




/ 




07/01/94 




.1105 




/ 




/ 




07/01/94 




.1107 




/ 




/ 




07/01/94 




.1201 




/ 




/ 




07/01/94 




.1203 




/ 




/ 




07/01/94 




.1207 




/ 








07/01/94 




.1209 




/ 




/ 




07/01/94 




.1211 




/ 








07/01/94 




.1301 - .1302 




/ 




/ 




07/01/94 




.1303 




/ 








07/01/94 




.1406 




/ 




/ 




07/01/94 




.1507- .1509 




/ 








07/01/94 




.1511 - .1512 




/ 




/ 




07/01/94 




.1516 




/ 








07/01/94 




.1519 




/ 




/ 




07/01/94 




.1520- .1521 




/ 








07/01/94 




.1533 




/ 




/ 




07/01/94 




.1537 


/ 










07/01/94 




19A .0206 




/ 




/ 




07/01/94 




17 NCAC 7B .2203 






/ 






07/01/94 




19A NCAC 3G .0207 




/ 








07/01/94 




31 .0202 




/ 








07/01/94 




.0307 




/ 




/ 




07/01/94 




.0503 




/ 




/ 




07/01/94 




.0601 - .0602 




/ 




/ 




07/01/94 




.0701 




/ 








07/01/94 




.0703 




/ 








07/01/94 




21 NCAC 36 .0211 




/ 




/ 




07/01/94 




.0213 




/ 








07/01/94 




.0218 




/ 




/ 




07/01/94 




1 


641 9:9 N 


ORTH i 


CAROL, 


INA RE 


GISTEl 


? 


Au 


gust 1, 1994 



LIST OF RULES CODIFIED 





Citation 


AD 


AM 


RP 


With 
Chgs 


Corr 


Eff. 
Date 


Temp. 
Expires 


21 NCAC 36 .0219 




/ 








07/01/94 




46 .1607 


/ 






/ 




07/01/94 




50 .0412 




/ 








08/01/94 




53 .0102 




/ 




/ 




07/01/94 




.0103 - .0105 






/ 






07/01/94 




.0201 






/ 






07/01/94 




.0203 






/ 






07/01/94 




.0204 


/ 










07/01/94 




.0301 




/ 








07/01/94 




.0303 






/ 






07/01/94 




.0304 




/ 




/ 




07/01/94 




.0401 




/ 




/ 




07/01/94 




.0402 


/ 










07/01/94 




.0501 - .0502 




/ 








07/01/94 




.0503 




/ 




/ 




07/01/94 




54 .2701 


/ 






/ 




07/01/94 




.2703 


/ 










07/01/94 




23 NCAC 2 TOC 










/ 






2D .0203 










/ 






.0325 










/ 






24 NCAC 5 .0101 


/ 










07/01/94 




.0102 


/ 






/ 




07/01/94 




.0301 - .0303 


/ 






/ 




07/01/94 




25 NCAC ID .2513 




/ 








07/01/94 


180 DAYS 



9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



642 



RRC OBJECTIONS 



A he Rules Review Commission (RRC) objected to the following rules in accordance with G.S. 
143B-30.2(c}. State agencies are required to respond to RRC as provided in G.S. 143B-30.2(d). 



COMMERCE 

Energy 

4 NCAC 12C .0007- Institutional Conservation Program 
ENVIRONMENT, HEALTH, AND NATURAL RESOURCES 
Departmental Rules 

15A NCAC IJ .0303 - Filing of Required Supplemental Information 

Agency Revised Rule 
15 A NCAC IJ .0701 - Public Necessity: Health: Safety and Vklfare 

Agency Revised Rule 
ISA NCAC IL .0302 - General Provisions 

Agency Revised Rule 
ISA NCAC IL .0602 - Public Health Need 

Agency Revised Rule 

Environmental Health 

ISA NCAC 18A .2610 - Storage: Handling: and Display of Food 

Agency Revised Rule 
ISA NCAC 18A .264S - Requirements for Limited Food Service Establishments 

Agency Revised Rule 
ISA NCAC 18C .0202 - Removal of Dissolved Matter and Suspended Matter 

Agency Revised Rule 
ISA NCAC 18C .0203 - Public Well Witer Supplies 

Agency Revised Rule 
ISA NCAC 18C .0402 - Witer Supply mils 

Agency Revised Rule 
ISA NCAC 18C .0403 - Surface Vhter Facilities 

Agency Revised Rule 
ISA NCAC 18C .0404 - Mbter Treatment Facilities 

Agency Revised Rule 
ISA NCAC 18C .040S - Storage of Fmished Vhter 

Agency Revised Rule 
ISA NCAC 18C .0710 - Other Wbter Treatment Plants 

Agency Revised Rule 
ISA NCAC 18C .0711 - Alternative Filtration Treatment Technologies 

Agency Revised Rule 
ISA NCAC 18C .0714 - Pilot Plant Studies 

Agency Revised Rule 
ISA NCAC 18C .0802 - Capacities: Determining Peak Demand 

Agency Revised Rule 
ISA NCAC 18C .0803 - Capacities: Determining Total \blume 

Agency Revised Rule 
ISA NCAC 18C .080S - Capacities: Elevated Storage 



RRC Objection 06/16/94 



RRC Objection 
Obj. Removed 
RRC Objection 
RRC Objection 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 



RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 



06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 



06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 



643 



9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



RRC OBJECTIONS 



Agency Revised Rule 
15A NCAC 18C . 1002 - Disinfection of Wells 

Agency Revised Rule 
15A NCAC 18C .1004- Disinfection of Filters 

Agency Revised Rule 
15A NCAC 18C . 1102 - Authorized Persons Within Watershed Area 

Agency Revised Rule 
ISA NCAC ISC . 1209 - Untreated Domestic Sewage or Industrial Wistes 

Agency Revised Rule 
ISA NCAC 18C 1406 - Control of Treatment Process 

Agency Revised Rule 
ISA NCAC 18C .1511 - Concentration of Iron 

Agency Revised Rule 
ISA NCAC 18C .1S12 - Concentration of Manganese 

Agency Revised Rule 
ISA NCAC 18C .1533 - Total Trihalomethanes Sampling/ Analysis: < 10,000 

Agency Revised Rule 



Obj. Removed 


06/16/94 


RRC Objection 


06/16/94 


Obj. Removed 


06/16/94 


RRC Objection 


06/16/94 


Obj. Removed 


06/16/94 


RRC Objection 


06/16/94 


Obj. Removed 


06/16/94 


RRC Objection 


06/16/94 


Obj. Removed 


06/16/94 


RRC Objection 


06/16/94 


Obj. Removed 


06/16/94 


RRC Objection 


06/16/94 


Obj. Removed 


06/16/94 


RRC Objection 


06/16/94 


Obj. Removed 


06/16/94 


RRC Objection 


06/16/94 


Obj. Removed 


06/16/94 



Environmental Management 



15A NCAC 2D .0101 - Definitions 

Agency Revised Rule 
ISA NCAC 2D .0932 - Gasoline Truck Tanks and Mipor Collection Systems 

Agency Revised Rule 



RRC Objection 06/16/94 

Obj. Removed 06/16/94 

RRC Objection 06/16/94 

Obj. Removed 06/16/94 



Wildlife Resources and Water Safety 



ISA NCAC lOD .0002 - General Regulations Regarding Use 

Agency Revised Rule 
ISA NCAC lOH .0101 - License to Operate 

Agency Revised Rule 



RRC Objection 06/16/94 

Obj. Removed 06/16/94 

RRC Objection 06/16/94 

Obj. Removed 06/16/94 



HUMAN RESOURCES 
Facility Services 



10 NCAC 3E .0201 - Building Code Requirements 

Agency Revised Rule 
10 NCAC 3E . 0206 - Elements and Equipment 

Agency Revised Rule 
10 NCAC 3R .4206 - Accessibility 

Agency Revised Rule 
10 NCAC 3U .0713 - Staff/Child Ratios for Medium and Large Centers 

Agency Revised Rule 



RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 



06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 



Mental Health, Developmental Disabilities and Substance Abuse Services 



10 NCAC 4SG .0139 - Security Requirements Generally 
Agency Revised Rule 



RRC Objection 
Obj. Removed 



06/16/94 
06/16/94 



Mental Health: General 



10 NCAC 14C . 1148 - Thomas S. Community Services 
Agency Revised Rule 



RRC Objection 
Obj. Removed 



06/16/94 
06/16/94 



9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



644 



RRC OBJECTIONS 



Mental Health: MR Centers 

10 NCAC 16A .0402 - Explanation of Terms 
Agency Revised Rule 

10 NCAC 16A .0403 - Designation Procedures 

Agency Revised Rule 

INDEPENDENT AGENCIES 

State Health Plan Purchasing Alliance Board 

24 NCAC 5 .0302 - Designation Process 
Agency Revised Rule 

INSURANCE 

Multiple Employer Welfare Arrangements 

11 NCAC 18 .0019 - "Qualified Actuary"; Maximum Net Retention Filing 

Agency Revised Rule 

11 NCAC 18 .0021 - Certification of Reserves Filing 

Agency Revised Rule 

JUSTICE 

Criminal Justice Education and Training Standards 

12 NCAC 9B .0208 - Basic Training - Probation/Rirole Officers 
Private Protective Services 

12 NCAC 7D .1101 - Definitions 

Agency Revised Rule 
12 NCAC 7D . 1104 - Training and Supervision Required in Level Three 

Agency Revised Rule 

LICENSING BOARDS AND COMMISSIONS 
Board of Nursing 

21 NCAC 36 .0211 - Examination 

Agency Revised Rule 
21 NCAC 36 .0218 - Licensure Without Examination (By Endorsement) 

Agency Revised Rule 

Professional Counselors 

21 NCAC 53 .0103 - Purpose of Organization 

Agency Repealed Rule 
21 NCAC 53 .0104 - Organization of the Board 

Agency Repealed Rule 
21 NCAC 53 .0201 - Supervision 

Agency Repealed Rule 
21 NCAC 53 .0303 - Wjrk Experiences 

Agency Repealed Rule 



RRC Objection 06/16/94 

Obj. Removed 06/16/94 

RRC Objection 06/16/94 

Obj. Removed 06/16/94 



RRC Objection 
Obj. Removed 



06/16/94 
06/16/94 



RRC Objection 06/16/94 

Obj. Removed 06/16/94 

RRC Objection 06/16/94 

Obj. Removed 06/16/94 



RRC Objection 07/14/94 



RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 



06/16/94 
06/16/94 
06/16/94 
06/16/94 



RRC Objection 06/16/94 

Obj. Removed 06/16/94 

RRC Objection 06/16/94 

Obj. Removed 06/16/94 



RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 



06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 
06/16/94 



645 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



RRC OBJECTIONS 



21 NCAC 53 .0305 - Exemption from Academic Qualification 

Rule Withdrawn by Agency 
21 NCAC 53 . 0503 - Renewal Fee 

Agency Revised Rule 

REVENUE 



06/16/94 
RRC Objection 06/16/94 
Obj. Removed 06/16/94 



Sales and Use Tax 

17 NCAC 7B .2608 - Plumbing: Heating: Air Cond/Elec Contractors: Purchases RRC Objection 05/19/94 

Rule Returned to Agency 06/16/94 

17 NCAC 7B .2609 - Plumbing: Heating: Air Cond/Elec Contractors: Sales RRC Objection 05/19/94 

Rule Returned to Agency 06/16/94 

17 NCAC 7B .5462 - White Goods Disposal Tax Report Form: E-500W RRC Objection 05/19/94 

Rule Returned to Agency 06/16/94 

17 NCAC 7B .5464 - Ice Certificate Form: E-599Y RRC Objection 05/19/94 

Rule Returned to Agency 06/16/94 

TRANSPORTATION 
Division of Motor Vehicles 



19A NCAC 31 .0307 - Courses of Instruction 

Agency Revised Rule 
19A NCAC 31 .0501 - Requirements 

Rule Withdrawn by Agency 



RRC Objection 
Obj. Removed 



06/16/94 
06/16/94 

06/16/94 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



646 



CONTESTED CASE DECISIONS 



1 his Section contains the full text of some of the more significant Administrative Law Judge decisions 
along with an index to all recent contested cases decisions which are filed under North Carolina*s 
Administrative Procedure Act. Copies of the decisions listed in the index and not published are available 
upon request for a minimal charge by contacting the Office of Administrative Hearings, (919) 733-2698. 



AGENCY 

ADMINISTRATION 

North Carolina Council for Women 

Family Violence Prevention Services v. N.C. Council for Women 

ALCOHOLIC BEVERAGE CONTROL COMMISSION 

AJcoholic Beverage Control Coram, v. Entertainment Group, Inc. 

Rayvon Stewart v. Alcoholic Beverage Control Commission 

Alcoholic Beverage Control Comm. v. Branchland, Inc. 

Alcoholic Beverage Control Comm. v. Peggy Sutton Waltere 

Russell Beraaid Speller d/b/a Cat's Disco v. Alcoholic Bev Ctl Comm. 

Alcoholic Beverage Control Comm. v. Branchlaod. Inc. 

Edward Ogunjobi, Club Piccadilli v. Alcoholic Beverage Control Comm. 

Robert Kovalaske, Nick Pikoulas, Joseph Marehbum, Evangelos Pikoulas, 

d/b/a Our Mom's BBQ v. AJcoholic Beverage Control Commission 
Christine George Williams v. Alcoholic Beverage Control Comm. 
Alcoholic Beverage Control Comm. v. Raleigh Limife, Inc. 
Alcoholic Beverage Control Comm. v. COLAP Enterprises, Inc. 
AJcoholic Beverage Control Comm. v. Me. Lucy Jarrell Pawell 
Alcoholic Beverage Control Comm. v. Daphne Ann Harrell 
Mr. & Mrs. Josh Bullock Jr. v. Alcoholic Beverage Control Comm. 
Jerome Crawford v. Alcoholic Beverage Control Commission 
Roy Dale Cagle v. Alcoholic Beverage Control Commission 

COMMERCE 

Savings Institutions Division 

James E. Byere, et al v. Savings Institutions 

CORRECTION 

Division of Prisons 

Gene Strader v. Department of Corrcclion 

CRIME CONTROL AND PUBLIC SAFETY 

Joseph Guems^ & I^rente, Robert Guernsey & Dolores Guernsey 
v. Pitt County Hospital Eastern Radiologists 

Crime Victims Compensation Commission 

James Hugh Baynes v. Crime Victims Compensation Commission 

Ross T. Bond v. Victims Compensation Commission 

James A. Canady v. Crime Victims Compensation Commission 

Virginia Roof v. Department of Crime Control & Public Safety 

Karen C. Tilghman v. Crime Victims Compensation Commission 

Rosemary Taylor v. Crime Victims Compensation Commission 

Violet E. Kline v. Crime Victims Compensation Commission 

James Benton v. Crime Victims Compensation Commission 

Pervy Clark v. Crime Victims Compensation Commission 

J. Richard Spencer v. Crime Victims Compensation Commission 

Barbara HerKieiBon v. Crime Victims Compensation Commission 



CASE 
NUMBER 



94 DOA 0242 



94 DOC 0252 



94CPS 0413 



AU 



EATEOF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



West 



04/13/94 



93 ABC 0719 


Gray 


03/02/94 


93 ABC 0793 


Nesnow 


04/11/94 


93 ABC 0892 


Morgan 


06/03/94 


93 ABC 0906 


Mann 


03/18/94 


93 ABC 0937 


Morrison 


03/07/94 


93 ABC 0993 


Moi^an 


06/03/94 


93 ABC 1024 


West 


03/03/94 


93 ABC 1029 


Gray 


03/04/94 


93 ABC 1057 


Bee ton 


04/21/94 


93 ABC 1485 


Mann 


03/11/94 


94 ABC 0060 


Nesnow 


06/07/94 


94 ABC 0070 


Moi?:an 


06/06/94 


94 ABC 0115 


Nesncw 


07/18/94 


94 ABC 0124 


Moi^gan 


06/06/94 


94 ABC 0125 


Morgan 


06/06/94 


94 ABC 0260 


West 


07/13/94 



93 COM 1622 Chess 



03/01/94 



Morrison 03/21/94 



Gray 



07/11/94 



93 CPS 0801 


West 


03/28/94 


9:2 NCR 


114 


93 CPS 1104 


West 


04/21/94 






93 CPS 1108 


Gray 


03/28/94 






93 CPS 1347 


Nesncw 


03/24/94 






93 CPS 1608 


Reilly 


05/17/94 


9;6 NCR 


407 


93 CPS 1626 


Nesnow 


05/25/94 






93 CPS 1670 


Moigan 


06/13/94 






94 CPS 0034 


Chess 


06/14/94 






94 CPS 0127 


Reilly 


04/19/94 






94 CPS 0157 


Chess 


06/14/94 






94 CPS 0259 


Morrison 


04/07/94 







647 



9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



CONTESTED CASE DECISIONS 



AGENCY 



Shirley Handsome v. Crime Victims Compensation Commission 
Gcorgcann Young v. Crime Victims Compensation Commission 
Lawrence L. Tyson v. Crime Victims Compensation Commission 
Lyman L. Chapman v. Crime Victims Compensation Commission 
Douglas and Virginia Wilson v. Crime Victims Compensation Comm. 
Michelle L. Wilcox v. Crime Victims Compensation Commission 
Michael G. Low v. Crime Victims Compensation Commission 
Mary E. Haskins v. Crime Victims Compensation Commission 

ENVIRONMENT. HEALTH, AND NATURAL RESOURCES 



CASE 




DATE OF 


PUBLISHED DECISION 


NUMBER 


ALJ 


DECISION 


REGISTER CITATION 


94 CPS 0286 


Gray 


04/28/94 




94 CPS 0292 


Reilly 


04/18/94 




94 CPS 0368 


Gray 


04/26/94 




94 CPS 0415 


Chess 


06/02/94 




94 CPS 0417 


Reilly 


06/07/94 




94 CPS 0467 


Reilly 


06/07/94 




94 CPS 0524 


Morrison 


06/13/94 




94 CPS 1406 


Gray 


03/17/94 





Ron D. Graham, Suzanne C. Giaham v. Robert Cobb, MeckJenbuig Cty 

I^tricia D. Solomon v. Macon County Health Department 

Kathryn A. Whitl^ v. Macon County Health Department 

Brook Hollow Estates v. Environment, Health, & Natural Resources 

Oceanfront Court, David C. Gagnon v. Environment, Health, & Nat. Res. 

Sam's Club #8219 v. MeckJenbuig County Health Department 

Eugene Crawfoid & Nancy P. Crawford v. Macon County Health Dept. 

Tri-Circuite, Inc. v. Environment, Health, & Natural Resources 



93EHR 1017 


Bee ton 


05/31/94 


93 EHR 1777 


West 


05/23/94 


94 EHR 0088 


West 


07/13/94 


94 EHR 0093 


West 


06/03/94 


94 EHR 0210 


Chess 


06/21/94 


94 EHR 0329 


Nesnow 


06/15/94 


94 EHR 0500 


Gray 


06/10/94 


94 EHR 0601 


Morrison 


06/30/94 



9:7 NCR 496 



Coastal Management 



Roger Fuller v. EHNR, Divs. of Coastal Mgmt & Environmental Mgmt 
Roger Fuller v. EHNR, Divs. of Coastal Mgmt & Environmental Mgmi 
Gary E. Montalbine v. Division of Coastal Management 
IW^-Midgett ftjlneiship v. Coastal Resources Commission 



89 EHR 1378-2 Gi^ 04/07/94 

90 EHR 0017^ Gray 04/07/94 

93 EHR 1792 Nesnow 03/21/94 

94 EHR 03 1 5 Gray 06/0 1 /94 



Environmental Health 



Jane C. 0*Malley, Melvin L. Cartwright v. EHNR & District Hlth Dept 

ftisquotank-Pirquimans-Camden-Chowan 
Environment, Health, & Natural Res. v. Claric Harris & Jessie Lee Harris 
Sidney S. Tate Jr. v. Dept. of Environment, Health, & Natural Resources 
Scotland Water Co., Laurin Lakes v. Environment, Health, & Nat. Res. 
Flc^ Benn Williams v. Dept. of Environment, Health, & Nat. Res. 



91 EHR 0838 


Becton 


04/06/94 


93 EHR 0924 


Beeton 


03/03/94 


94 EHR 0005 


Reilly 


05/24/94 


94 EHR 0200 


Nesaow 


04/27/94 


94 EHR 0333 


Reilly 


05/18/94 



Environmental Management 



David Springer v. Dept. of Environment, Health, & Natural Resources 
Petroleum Installation Equipment Co., Inc. v. Env., Health & Nat. Res. 
Jack Griffin v. Dept. of Environment, Health, and Natural Resources 



92 EHR 1797 


Morgan 


05/19/94 


93 EHR 0531 


Chess 


03/21/94 


93 EHR 1030 


Becton 


03/21/94 



Land Resources 



Town of KerneiBville(LQS 93-053) V. Eovironmcnt, Health, & Nat. Res. 93 EHR 1781 Chess 06/29/94 

Royce Perry, Paul Perry V. Dept. of Environment, Health, & Natural Res. 94 EHR 0525 Gray 07/01/94 



9:8 NCR 581 



Marine Fisheries 



Robert I. Swinson, Virginia S. Swinson v. EHNR, Div/Marine Fisheries 
James Goodman v. EHNR, Division of Marine Fisheries 



93 EHR 0394 

94 EHR 0035 



Gray 

Nesnow 



04/11/94 
07/18/94 



9:9 NCR 660 



SoUd Wast€ Management 



Roger Sessoms v. EHNR/ Asbestos Hazard Management Branch 
Bertie Citizens Action Coalition, Inc.; Willaid J. Oliver, Reginald Early, 
Herbert Jenkins, Jr., Liodwx>d Earl Tripp, Willie Warren Tripp, Mary 
Alice Cherry, and Kathy Buiden v. EHNR, Solid Waste Management 
Division, and East Carolina Environmental, Inc., j^ldington Environmental 
Inc., et al. 



93 EHR 0951 
93 EHR 1045 



Gray 
Morrison 



03/28/94 
04/06/94 



9:3 NCR 214 



" Consolidated Cases. 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



648 



CONTESTED CASE DECISIONS 



AGENCY 



CASE 
NUMBER 



AU 



DATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER dTATICT^ 



HUMAN RESOURCES 



Breoda C. Robinson v. Department of Human Resources 
Betty Rhodes v. Department of Human Resources 

Distribuiion Child Support 

Jachell D. I^rker v. Department of Human Resources 

Division of Child Development 

Judith Fridley v. Div. of Child Development/ Abuse/N^lect Unit 

DHR, Division of Child Development v. Joyce Gale 

Laureen Holt. ED ,^2 6-0-0003 7 v. DHR. Div. of Child Development 

Gloria C. Haith v. Department of Human Resources 

Gloria C. Haith v. Daycare Consultant 

Charles E. Smith v. Department of Human Resources 

Scotfs Loving Day Care & Nursery, Mrs. Willie L. Scott v. DHR 

Belinda K. Mitchell v. Human Resources, Div. of Child Development 

Living Woid Day Care, Jonathan Lankfoid v. Dept. of Human Resources 

Facility Sertices 

Charles E. Hunter, Jr., M.D. & Coastal Perfusion Svcs, Inc. v. Cert of 
Need Section, Div of I%cility Svcs, DHR, aod Wilmington Perfusion 
Corp. and Howard F. Marks, Jr., M.D. 

Presbyterian-Orthopaedic Hospital v. Department of Human Resources 

Judy Hoben Wallace v. Department of Human Resources 

Lowell Stafford v. Department of Human Resources 

Division of Medical Assistance 

J.R., by and through her agent & Personal Rep., Hank Neal v. DHR 
David Yott v. I>epartment of Human Resources 

Division of Medical Assistance v. Catawba Cty Dept. of Social Services 
Lu Ann Lcidy, MD/Dorothea Dix Hosp. Child & Youth v. Medical Assis. 

Division of Social Services 

Evelyn Moore v. Department of Human Resources 

Nathaniel Harrell. Annie Harrell v. Department of Social Services 

Child Support Enforcement Section 

Dallon Felton Sr. v. Department of Human Resources 
William Heckstall v. Department of Human Resources 
Luther Hatcher v. Department of Human Resources 
Bryan Jeffrey Cole v. Department of Human Resources 
Anthory E. Bullaai v. Department of Human Resources 
Dexter L. Chambeis v. Department of Human Resources 
Ronald E. Johnson v. Department of Human Resources 
Roger Moore v. Department of Human Resources 
Alvin Lee Martin v. Department of Human Resources 
Robert Youi^ v. Department of Human Resources 
Henry M. Dillaid v. Department of Human Resources 
Antonio Townsend v. Department of Human Resources 
Keith M. Gr^ v. Department of Human Resources 
Troy E. Pinkn^ v. Department of Human Resources 
Anthoi^ A. Macon v. Department of Human Resources 
Walter Lee Corbett v. Department of Human Resources 
Joseph E. Kemstine v. Department of Human Resources 
Joe Louis Mayo v. Department of Human Resources 
Bobby Lewis Smith v. Department of Human Resources 
Louis C. Cade v. Department of Human Resources 
Richard J. Swarm v. Department of Human Resources 
Nash Andrew Newsome v. Department of Human Resources 
James E. Watson v. Department of Human Resources 
Robert Lee Barrett v. Department of Human Resources 



94 DHR 0365 
94 DHR 0501 



West 
Morrison 



06/01/94 
06/02/94 



93 DCS 0371 Morgan 07/14/94 



93 DHR 0973 


Morrison 


03/08/94 


93 DHR 1344 


Gray 


04/28/94 


93 DHR 1549 


Becton 


07/13/94 


93 DHR 1707 


Neanow 


03/22/94 


93 DHR 1787 


Nesncw 


03/14/94 


93 DHR 1797 


NesnOTv 


03/21/94 


94 DHR 0106 


Nesncw 


06/29/94 


94 DHR 0119 


Reilly 


06/30/94 


94 DHR 0168 


Ncsncw 


03/23/94 



93 DHR 0746 


Morgan 


04/11/94 


93 DHR 0805 


Reilly 


03/11/94 


93 DHR 0935 


Gray 


05/23/94 


93 DHR 1381 


Gray 


04/15/94 



93 DHR 0528 


Gray 


04/27/94 


93 DHR 1113 


Gray 


04/05/94 


93 DHR 1778 


West 


03/04/94 


94 DHR 0448 


Chess 


06/21/94 



94 DHR 0293 
94 DHR 0440 



Reilly 
Gray 



04/15/94 
06/27/94 



92 CSE 0532 


Morgan 


07/13/94 


93 CSE 1077 


Reilly 


03/14/94 


93 CSE 1082 


Mann 


05/24/94 


93 CSE 1091 


Becton 


03/30/94 


93 CSE 1094 


Nesnow 


06/13/94 


93 CSE 1 124 


West 


03/28/94 


93 CSE 1125 


Becton 


03/30/94 


93 CSE 1127 


Becton 


04/14/94 


93 CSE 1128 


NesncKv 


04/04/94 


93 CSE 1133 


Reilly 


04/18/94 


93 CSE 1135 


Nesnow 


06/13/94 


93 CSE 1139 


Becton 


03/30/94 


93 CSE 1140 


Nesnow 


06/28/94 


93 CSE 1148 


Mann 


03/29/94 


93 CSE 1149 


Gray 


04/26/94 


93 CSE 1150 


Reilly 


03/30/94 


93 CSE 1151 


Moi^an 


07/15/94 


93 CSE 1161 


West 


04/19/94 


93 CSE 1162 


Nesnow 


06/16/94 


93 CSE 1166 


Morrison 


06/16/94 


93 CSE 1167 


Reilly 


06/17/94 


93 CSE 1170 


Mann 


03/17/94 


93 CSE 1171 


Gray 


04/26/94 


93 CSE 1172 


Morrison 


04/20/94 



649 



9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



CONTESTED CASE DECISIONS 



AGENCY 



Betty A. Williams, Fred E. Jones v. Department of Human Resources 

Jeff A. Taylor v. Department of Human Resources 

Eric G. Sykes v. Department of Human Resources 

Morris Ray Bethel v. Department of Human Resources 

Willie C. Hollis v. Department of Human Resources 

Ernest N. Pruitt Jr. v. Department of Human Resources 

Bernadetfc Cook v. Department of Human Resources 

Lem Person v. Department of Human Resources 

Bobty Lee McCuUeis Jr. v. Department of Human Resources 

Randall R. Rhodes v. Department of Human Resources 

Michael V. Dockery v. Department of Human Resources 

Flcyd E. Bail^ v. Department of Human Resources 

Dennis W. Nolan v. Department of Human Resources 

Robert Calvin Connor v. Department of Human Resources 

James D. Williams v. Department of Human Resources 

Marty Fran2ien v. Department of Human Resources 

\%ughn D. Peaisall v. Department of Human Resources 

Larry D. Dawson v. Department of Human Resources 

McDaniel Teeter Jr. v. Department of Human Resources 

Kii^ D. Graham v. Department of Human Resources 

Deiek Watson v. Department of Human Resources 

Luther Boiden v. Department of Human Resources 

Walter B. Lester v. Department of Human Resources 

Larry Cornelius Smith v. Department of Human Resources 

Robert C. Lee Jr. v. Department of Human Resources 

Sidney Ray TUggle Jr. v. Department of Human Resources 

Michael A. Amos v. Department of Human Resources 

Gregory N. Winley v. Department of Human Resources 

Ronald Brown v. Department of Human Resources 

James L. IMiillips v. Department of Human Resources 

Geoi^e Aaron Collins v. Department of Human Resources 

Samuel L. Dodd v. Department of Human Resources 

William A. Selleis v. Department of Human Resources 

Jerry Mclver v. Department of Human Resources 

Johnny B. Little v. Department of Human Resources 

Kenneth W. Cooper v. Department of Human Resources 

Nathan D. Winston v. Department of Human Resources 

Charles W. Norwood Jr. v. Department of Human Resources 

David L. Terry v. Department of Human Resources 

Audwin Linds^ v. Department of Human Resources 

Steven A. Elmquist v. Department of Human Resources 

Kelvin Dean Jackson v. Department of Human Resources 

Dennis E. Fountain Jr. v. Department of Human Resources 

Mark E. Rogers v. Department of Human Resources 

Edna \fonCannon v. Department of Human Resources 

Thomas A. Ayeis v. Department of Human Resources 

Daniel Thomas Hefele v. Department of Human Resources 

Gilbert J. Gutiencz v. Department of Human Resources 

Alton D. Johnson v. Department of Human Resources 

Darryl C. Thompson v. Department of Human Resources 

Chester Sandea v. Department of Human Resources 

Rodney Guyton v. Department of Human Resources 

Donald W. Clark v. Department of Human Resources 

William E. David Jr. v. Department of Human Resources 

John J. Gabriel v. Department of Human Resources 

Robert Hayes v. Department of Human Resources 

Clark Anthony Bryant v. Department of Human Resources 

Timothy D. Evans v. Department of Human Resources 

Billy Ednanj Smith v. Department of Human Resources 

Allen D. Terrell v. Department of Human Resources 

Ray C. Moses v. Department of Human Resources 

Mickey Bridgett v. Department of Human Resources 

Bart Ransom v. Department of Human Resources 

William H. Simpson Sr v. Department of Human Resources 

James D. McClure Jr. v. Department of Human Resources 

Christopher Ivan Smith v. Department of Human Resources 

Douglas L. Chcrrix v. Department of Human Resources 

Dwaync Lamont Thompson v. Department of Human Resources 



CASE 




DATE OF PUBLISHED DECISION 


NUMBER 


ALJ 


DECISION REGISTER CITATION 


93CSE 1178 


Nesnow 


04/20/94 


93CSE 1180 


Morgan 


07/15/94 


93CSE 1181 


Bee ton 


04/20/94 


93 CSE 1188 


West 


07/11/94 


93 CSE 1191 


Bee ton 


05/09/94 


93 CSE 1197 


Nesnow 


06/28/94 


93 CSE 1202 


Gray 


04/27/94 


93 CSE 1214 


Morrison 


06/16/94 


93 CSE 1215 


Reilly 


06/17/94 


93 CSE 1219 


Nesnow 


06/16/94 


93 CSE 1222 


Morgan 


07/15/94 


93 CSE 1227 


Mann 


07/07/94 


93 CSE 1254 


Morrison 


04/27/94 


93 CSE 1258 


West 


04/19/94 


93 CSE 1259 


West 


04/19/94 


93 CSE 1264 


Morgan 


07/15/94 


93 CSE 1267 


Bee ton 


04/20/94 


93 CSE 1273 


Morrison 


07/07/94 


93 CSE 1274 


Morrison 


06/30/94 


93 CSE 1275 


Bee ton 


05/18/94 


93 CSE 1283 


Reilly 


06/30/94 


93 CSE 1284 


West 


06/23/94 


93 CSE 1287 


Nesnow 


06/28/94 


93 CSE 1302 


Morrison 


06/30/94 


93 CSE 1303 


Reilly 


06/30/94 


93 CSE 1307 


West 


04/25/94 


93 CSE 1308 


West 


07/15/94 


93 CSE 1316 


Bee ton 


06/14/94 


93 CSE 1318 


Becton 


06/29/94 


93 CSE 1326 


Reilly 


06/17/94 


93 CSE 1331 


West 


04/25/94 


93 CSE 1357 


Gray 


03/31/94 


93 CSE 1359 


Morrison 


04/20/94 


93 CSE 1362 


Reilly 


06/30/94 


93 CSE 1363 


West 


06/23/94 


93 CSE 1364 


West 


04/27/94 


93 CSE 1365 


Nesnow 


07/07/94 


93 CSE 1385 


West 


06/13/94 


93 CSE 1386 


Mann 


05/18/94 


93 CSE 1390 


Morrison 


07/15/94 


93 CSE 1392 


Reilly 


04/29/94 


93 CSE 1394 


West 


06/13/94 


93 CSE 1414 


Chess 


05/13/94 


93 CSE 1415 


Mann 


05/03/94 


93 CSE 1417 


Morrison 


06/14/94 


93 CSE 1431 


Morrison 


06/30/94 


93 CSE 1432 


Morrison 


04/28/94 


93 CSE 1433 


Morrison 


05/13/94 


93 CSE 1434 


Reilly 


04/29/94 


93 CSE 1435 


Reilly 


06/30/94 


93 CSE 1437 


West 


04/19/94 


93 CSE 1439 


West 


04/21/94 


93 CSE 1441 


Nesncw 


05/13/94 


93 CSE 1442 


Nesnow 


05/02/94 


93 CSE 1452 


Chess 


05/16/94 


93 CSE 1453 


Mann 


07/07/94 


93 CSE 1455 


Gray 


06/30/94 


93 CSE 1460 


Reilly 


04/28/94 


93 CSE 1461 


West 


04/19/94 


93 CSE 1463 


Nesnow 


05/02/94 


93 CSE 1464 


Nesnow 


04/28/94 


93 CSE 1468 


Becton 


05/24/94 


93 CSE 1495 


Morrison 


04/29/94 


93 CSE 1497 


West 


04/19/94 


93 CSE 1500 


Becton 


05/13/94 


93 CSE 1510 


Gray 


07/07/94 


93 CSE 1512 


Gray 


05/13/94 


93 CSE 1515 


Morrison 


04/21/94 



9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



650 



CONTESTED CASE DECISIONS 



AGENCY 



Horace Lee Bass v. Departmenl of Human Re&outces 
Michael Wilder v. Department of Human Resources 
James A. Cephas v. Department of Human Resources 
Ed^vaid E. Furr v. Department of Human Resources 
Mark E. Campbell v. Department of Human Resources 
Barriet Easterling v. Department of Human Resources 
Wade A. Burgess v. Department of Human Resources 
Billy Dale Bean^ v. Department of Human Resources 
James E. Wiggins Sr. v. Department of Human Resources 
Tony A. Draughon v. Department of Human Resources 
Timothy J. Jones v. Department of Human Resources 
Randall E. Hunter v. Department of Human Resources 
Cyrus R. Luallen v. Department of Human Resources 
Alton E. Simpson Jr v. Department of Human Resources 
Johnity T. Usher v. Department of Human Resources 
Charles Darrell Matthews v. Department of Human Resources 
John William \^ce Jr. v. Department of Human Resources 
Michael S. Rhynes v. Department of Human Resources 
Brian Gilmore v. Department of Human Resourc^es 
Jesse Jeremy Bullock v. Department of Human Resources 
Ronald E. Loweke v. Department of Human Resources 
Robert D. F^rker v. Department of Human Resources 
Charles F. McKirahan Jr. v. Department of Human Resources 
Benjamin J. Stroud v. Departmenl of Human Resources 
Tony A. Miles v. Department of Human Resources 
Dwayne L. Allen v. Department of Human Resources 
Joe C. Dean v. Department of Human Resources 
Nfemon Bullock v. Department of Human Resources 
Raymond Scott Eaton v. Department of Human Resources 
Royston D. Blandford III v. Department of Human Resources 
Daioo Wayne Smith v. Department of Human Resources 



CASE 




DATE OF PUBLISHED DECISION 


NU7WBER 


ALJ 


DECISION REGISTER CITATION 


93 CSE 1520 


Morrison 


05/13/94 


93 CSE 1521 


Reilly 


04/28/94 


93 CSE 1523 


ReiUy 


05/13/94 


93 CSE 1524 


Reilly 


06/17/94 


93 CSE 1537 


Nesnow 


05/19/94 


93 CSE 1560 


Mann 


05/18/94 


93 CSE 1568 


Morrison 


04/28/94 


93 CSE 1569 


Morrison 


05/13/94 


93 CSE 1571 


Morrison 


05/13/94 


93 CSE 1572 


Reilly 


07/07/94 


93 CSE 1576 


West 


04/19/94 


93 CSE 1579 


West 


04/19/94 


93 CSE 1583 


Nesnow 


06/16/94 


93 CSE 1591 


Bee ton 


04/20/94 


93 CSE 1592 


Chess 


05/19/94 


93 CSE 1596 


West 


06/13/94 


93 CSE 1597 


Becton 


05/13/94 


93 CSE 1599 


NesnOTv 


06/30/94 


93 CSE 1615 


Chess 


05/13/94 


93 CSE 1632 


Morrison 


06/14/94 


93 CSE 1635 


Reilly 


06/17/94 


93 CSE 1637 


Reilly 


06/29/94 


93 CSE 1640 


West 


06/14/94 


93 CSE 1648 


Becton 


05/19/94 


93 CSE 1654 


Mann 


05/24/94 


93 CSE 1655 


Mann 


05/17/94 


93 CSE 1715 


Gray 


05/23/94 


93 CSE 1743 


NesnOTv 


07/07/94 


93 CSE 1761 


Becton 


06/29/94 


94 CSE 0095 


West 


04/19/94 


94 CSE 0300 


Gray 


06/27/94 



JUSTICE 



AlojTH Systems Licensing Board 

Alarm Systems Licensing Boani v. George P. Baker 
Private ProtectiyK Services Board 



93 DOJ 0457 



Nesnow 



03/10/94 



Larry C. Hopidns v. Private Protective Services Boaid 
Gregory K. Brooks v. Private Protective Services Boaid 
Stephen M. Rose v. Private Protective Services Boatd 
Lemuel Lee Clark Jr v. Private Protective Services Boaid 



93 DOJ 1618 


Morrison 


03/07/94 


94 DOJ 0008 


Nesnow 


06/28/94 


94 DOJ 0359 


NesnOTV 


05/19/94 


94 DOJ 0360 


Nesnow 


05/19/94 



Training and Standards Di\idon 



Curtiss La,nce R)teat v. Criminal Justice Ed. & Training Stds. Comm. 
Willie David Moore v. Criminal Justice Ed. & Training Stds. Comm. 
Gleim Travis Stout v. Criminal Justice Ed. &l Training Stds. Comm. 
Steven W. Wray v. Sheriffs' Education & Training Standards Comm. 
J. Slevan North v. Sheriffs' Education & Training Standaids Comm. 
Gregory Blake Manning v. Criminal Justice Ed. & Training Stds. Comm. 
William Franklin Sheetz v. Sheriffs' Education & Training Stds. Comm. 



93 DOJ 0231 


Chess 


03/28/94 


93 DOJ 1071 


Nesnow 


04/11/94 


93 DOJ 1409 


Gray 


03/03/94 


93 DOJ 1803 


Chess 


06/29/94 


94 DOJ 0040 


Chess 


06/16/94 


94 DOJ 0048 


Gray 


03/29/94 


94 DOJ 0196 


Chess 


06/16/94 



9:3 NCR 218 



MORTUARY SCIENCE 



Mortuary Science v. Perry J. BrowTi, & Brown's Funeral Directors 
PUBLIC EDUCATION 



93 BMS 0532 



Chess 



03/28/94 



Nancy Watson v. Board of Education 

Janet L. Wilcox v. Carteret County Board of Education 



93EDC0234 
93 EDC 0451 



Chess 
Mann 



02/28/94 
02/21/94 



9:2 NCR 108 



STATE HEALTH BENEFITS OFFICE 

Linda C. Campbell V Teachee & St Emp Major Medical Plan 93 INS 0410 Becton 04/22/94 

Timothy L. Coggins v Teacheis' & St Emp Comp Major Med Plan 93 INS 0929 Morrison 03/04/94 



651 



9:9 



NORTH CAROUNA REGISTER 



August 1, 1994 



CONTESTED CASE DECISIONS 



AGENCY 



CASE 
NUMBER 



ALJ 



DATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



STATE PERSONNEL 

Agricultural and Technical State University 

Linda D. Williams v. Agricultual and Technical Slate Univeisity 
Juaoita D. Murphy v. Agricultual and Technical State Univereity 
Thomas M. Simpson v. Agricultuol and Technical State Univeisity 

Department of Agriculture 

Donald H. Crawfoid v. Department of Agricultuc 

Catawba County 

Sandra J. Cunningham v. Catawba County 

Sorth Carolina Central University 

Ha-Yil>ah Ha-She'B v. NCCU 

Cherry Hospital 

Charles F. Fields v. Cherry Hospital 

Department of Commerce 

Ruth Daniel-fcny v. Department of Commerce 

Department of Correction 

Leiand K. Williams v. Department of Correction 

Elroy Lewis v. North Central Area - Dept of Correction, Robert Lewis 

Steven R. Kellison v. Department of Correction 

Bert Esworthy v. Department of Correction 

Merron Burrus v. Department of Correction 

Junius C. Rige v. Dept. of Correction, Secy. Franklin Freeman 

Richaid Hopkins v. Department of Correction 

Alfred B. Hunt v. Department of Correction 

Charles Home v. Equal Emp. Opportunity Officer & Dept. of Correction 

Adrian E. Graham v. Intensive Probation/I^role 

Guilford Correctional Center 

Ann R. Williams v. Guilfoid Correctional Center (!'4440 

Cosmetic Art Exairuners 

Mary Quaintance v. N.C. State Boaid of Cosmetic Art Examiners 

Department of Crime Control and Public S<rfety 

Don R. Massenbuig v. Department of Crime Control & Public Safety 
Fred L. Kearny v. Department of Crime Control & Public Safety 
Sylvia Nance v. Department of Crime Control & Public Safety 
Lewis G. Baker v. Crime Control & Public Safety, Office Adj. General 

Durham County Health Department 

Lyila Denell Stockton v. Durham County Health Department 

Elizabeth Gty State University 

James Charles Knox v. Eli2abeth City State Univereity 

Employrrunt Security Commission of North Carolina 

Rejeanne B. LeFrancois v. Emplcyment Security Commission of N.C. 



93 OSP 0089 


Chess 


03/23/94 


93 OSP 0708 


Morrison 


03/16/94 


93 OSP 1393 


Gray 


03/24/94 



94 OSP 0108 



93 OSP 1097 



93 OSP 0875 



94 OSP 0498 



93 OSP 0725 



94 OSP 0428 



94 OSP 0372 



93 OSP 1780 



94 OSP 0207 



93 OSP 1069 



Reilly 



Reilly 



Becton 



05/23/94 



04/29/94 



04/13/94 



Morrison 06/15/94 



Chess 



03/04/94 



West 



Chess 



06/22/94 



06/14/94 



90 OSP 0239 


Chess 


04/28/94 


91 OSP 0401 


West 


03/18/94 


92 OSP 1463 


Reilly 


03/21/94 


94 OSP 0572 


Mann 


07/12/94 



Gray 



Gray 



West 



05/25/94 



06/17/94 



04/08/94 



9:4 NCR 292 



9:3 NCR 211 



9:1 NCR 63 



91 OSP 1287 


Chess 


02/22/94 




92 OSP 1770 


Becton 


05/24/94 


9:6 NCR 395 


93 OSP 0283 


Chess 


06/15/94 




93 OSP 0711 


Chess 


04/21/94 




93 OSP 1145 


West 


06/01/94 




93 OSP 1794 


Mann 


07/08/94 




94 OSP 0041 


Chess 


06/16/94 




94 OSP 0243 


Reilly 


04/20/94 




94 OSP 0244 


Nesnow 


06/16/94 




94 OSP 0261 


Morrison 


04/26/94 





9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



652 



CONTESTED CASE DECISIONS 



AGENCY 



CASE 
NUMBER 



ALJ 



DATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



Departnunt of EHvimmmtmt, Health, and Natural Resourctt 

Division of Marine Fisheries 

William D. Nicely v. EnviioDmcnt, Health, & Natural Resources 

Fayetteville State University 

Roscoe L. Williams v. I^etteville State University 

Department of Human Resources 

[oez Latta v. Department of Human Resources 

Charla S. Davis v. Department of Human Resources 

Rose Mary Taylor v. Department of Human Resources, Mundoch Center 

David R. Rodgers v. Timmy Summcrville, Stonewall Jackson School 

Cmven County Department cf Social Services 

Shirley A. Holland v. Craven Cty. Dcpt. /Social Services & Craven Cly. 
Nettie Jane Godwin (Lawhom) v. Craven Cty. DSS & Craven Cty. 
Violet P. Kelly v. Craven Cty. Dcpt. of Social Services & Craven Cty. 

Durham County Department of Social Senices 
Belinda F. Jones v. Daniel Hudgins, Durham Cty Dept of Social Svcs 

Haywood County Department of Social Senices 
Dorothy Morrow v. Hayiwood County Department of Social Services 

Mental Health/Menial Retardation 
Yvonne G. Johnson v. Blue Ridge Mental Health 



92 OSP 1454 



93 OSP 0487 



93 OSP 0728 



94 OSP 0186 



93 OSP 1604 



Vhke County Mental Health, Developmental Disabilities, atui Substance Abuse Services 
Julia Morgan Brarmon v. Wake County MH/DD/SAS 94 OSP 0214 

N.C. State Univeraty 

Laura K. Reynolds v. N.C. State University - Dept. of Public Safety 
Department of Transportation 



Glerm \. Hodge Jr. v. Samuel Hunt, Sec*y. Dept. of Transportation 

Glerm \. Hodge Jr. v. Samuel Hunt, Sec'y. Dept. of Transportation 

Betsy Johnston Powell v. Department of Transportation 

Arnold Craig v. Samuel Hunt, Secretary Department of Transportation 

Susan H. Cole v. Department of Transportation, Div. of Motor Vehicles 

Clyde Lem Hairston v. Department of Transportation 

Heruy C. Puegh v. Department of Transportation 



University of North Carolina at Chapel Bill 

Eric W. Browning v. UNC-Chapel Hill 93 OSP 0925 

UNC Hospitals 

Barry Alonzo Nichols v. UNC Hospitals Central Dist. Sect. 94 OSP 0509 

Wake County School System 

Lula Mae Freeman v. Wake County School System 94 OSP 0576 

The WUtaker Schaol 

Dwayne R. Cooke v. The Whitaker School 94 OSP 0328 



Becton 



West 



05/04/94 



06/22/94 



93 OSP 0830 


Becton 


03/28/94 


93 OSP 1762 


Gray 


03/03/94 


93 OSP 0047 


Gray 


05/06/94 


94 OSP 0087 


Chess 


03/16/94 



Chess 



West 



Becton 



Reilly 



04/11/94 



06/17/94 



03/18/94 



04/14/94 



92 OSP 0828 Morgan 05/26/94 



Morrison 05/03/94 



Morrison 06/15/94 



Morrison 06/28/94 



9:5 NCR 333 



93 OSP 1606 


Gray 


07/01/94 




93 OSP 1607 


Gr^ 


07/18/94 


9:9 NCR 655 


93 OSP 1805 


Reilly 


07/05/94 





93 OSP 0297*" 


Morrison 


03/10/94 


9:1 NCR 


60 


93 OSP 0500*' 


Morrison 


03/10/94 


9:1 NCR 


60 


93 OSP 0550 


Morrison 


03/28/94 






93 OSP 0586 


Nesncw 


07/11/94 






93 OSP 0908 


Morrison 


07/15/94 






93 OSP 0944 


Chess 


02/28/94 






93 OSP 1710 


NesncNv 


05/24/94 







9:5 NCR 342 



Chess 



06/02/94 



653 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



CONTESTED CASE DECISIONS 



AGENCY 



CASE 
NUMBER 



ALJ 



DATE OF 
DECISION 



PUBLISHED DECISION 
REGISTER CITATION 



STATE TREASURER 

Retirement Systems Division 

Molly Wiebenson v. Bd./Tnistees/TeacheiB* & State Emplcyees' Ret. Sys. 
Nathan Relds v. Bd./Tnjstees/Teacheis' & State Emplcyees' Ret. Sys. 
John C. Russell v, Bd./Trustees/TeacheiB' & State Emplcyees* Ret. Sys. 
Robert A. Slade v. Bd./Trustees/N.C. Local Govtl. Emp. Ret. System 
Connie B. Grant v. Bd./Tnjstees/TeacheiB' & State Emplcyees' Ret. Sys. 
James E. Walker, Ind. & Admin for the Estate of Sarah S. Walker v Bd./ 

Trustees/N.C. Local Govt. Emp. Ret. System 
Eli2Bbeth M. Dudl^ v, Bd./Trustees/TeacheiB' & Stale Emps' Ret. Sys. 
Kenneth A. Gleim v. Bd.H'rustees/TeacheiB' & St Emplcyees' Ret. Sys. 
Joseph Fulton v. Bd./Trustecs/TeachcB' & State Employees' Ret. Sys. 

UNIVERSITY OF NORTH CAROLINA 



92 DST 0015 


Morgan 


05/26/94 


9:6 


NCR 


403 


93 DST 0161 


Morrison 


05/18/94 








93 DST 0164 


West 


03/07/94 








93 DST 0785 


Becton 


03/18/94 


9:1 


NCR 


68 


93 DST 0883 


Chess 


06/15/94 








93 DST 1054 


Becton 


05/31/94 


9:7 


NCR 


490 


93 DST 1474 


Nesnow 


03/28/94 








93 DST 1612 


Morrison 


05/18/94 








93 DST 1731 


Becton 


05/25/94 









Nixon OmolcxJun v. UNC Physicians and Associates 



94 UNC 0295 



Chess 



06/27/94 



9:9 



NORTH CAROLINA REGISTER 



August I, 1994 



654 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA 
COUNTY OF CRAVEN 



IN THE OFFICE OF 

ADMINISTRATIVE HEARINGS 

93 OSP 1607 



NETTIE JANE GODWIN (LAWHORN), 
Petitioner, 



CRAVEN COUNTY DEPARTMENT OF 
SOCIAL SERVICES AND CRAVEN COUNTY, 
Respondent. 



RECOMMENDED DECISION 



This matter was heard before Beecher R. Gray, administrative law judge, in New Bern on April 19 
and 21, 1994. Upon Respondent's oral motion, without objection from Petitioner, an order was orally entered 
on the record allowing Respondent, for purposes of this hearing, to introduce materials in Petitioner's 
personnel file which go beyond those matters made public by Chapter 126 of the General Statutes of North 
Carolina. At the conclusion of all evidence, the parties requested and received leave to file proposed decisions 
and written arguments not later than June 1, 1994. Respondent's proposed decision was received in the Office 
of Administrative Hearings on June 1, 1994, Petitioner's proposed decision was filed in the Office of 
Administrative Hearings on June 6, 1993. Respondent immediately thereafter filed a letter objecting to 
Petitioner's late filing, citing a strategic advantage to Petitioner by being able to first read Respondent's 
proposal before Petitioner's was filed. Based on Petitioner's late filing and Respondent's objection thereto, 
Petitioner's proposed decision was not considered in the determination of this case. 



APPEARANCES 



Petitioner: 
Respondent: 



David P. Voerman, Esq. 
Cynthia L. Turco, Esq. 



ISSUE 

Whether Respondent's decision to terminate the employment of Petitioner on July 15, 1993 for 
unacceptable personal conduct is supported by substantial evidence amounting to just cause. 

FEvfDINGS OF FACT 

1. The parties received notice of hearing by certified mail more than fifteen (15) days prior to the 
hearing and each stipulated that notice of hearing is in all respects proper. 

2. Petitioner is a resident of Craven County. She was employed by Respondent as a Social Worker on 
November 19, 1990. When her employment was terminated by Respondent on July 15, 1993, 
Petitioner was classified as a Social Worker 11 in a skills training program known as the JOBS 
program. Petitioner's duties as a Social Worker II in the JOBS program involved counseling 
recipients of Aid to Families with Dependent Children (APDC), Social Security, and other benefits 
with regard to assessment of needs for training and skill development. She also handled certain fiscal 
responsibilities relating to her clients, including providing assistance with budgeting and management 
of financial resources and, in some cases, assuming responsibilities as a payee of client funds. 

3. In 1987 Petitioner's husband died, leaving outstanding partnership notes due at United Carolina Bank. 
Petitioner paid off those notes even though she was not legally obligated to do so. 



655 



9:9 



NORTH CAROUNA REGISTER 



August 1, 1994 



CONTESTED CASE DECISIONS 



4. In the late fell of 1987, Petitioner and her mother opened a joint checking account in a local bank. 
The mother directed the deposit of certain benefit checks she routinely received, including retirement 
and social security, into this joint account. Petitioner also placed funds into this account which 
became co-mingled with her mother's funds. At about the same time. Petitioner's mother transferred 
certain insurance policies to Petitioner. Petitioner became both beneficiary and owner of the policies. 

5. Petitioner was experiencing financial problems and elected to allow the cash value of the insurance 
policies to be used to pay premiums due until the policies were exhausted. Petitioner did not disclose 
this to her mother and was under no obligation to do so since she was the sole owner and beneficiary 
of the policies. 

6. At some time prior to September, 1992, Petitioner's mother experienced some physical problems and 
was placed in a nursing home for recuperation. Petitioner signed for personal financial responsibility 
for the uncovered portion of the cost of her mother's care at the nursing home. No particular funds 
were designated or promised to be used to pay this obligation to the nursing home. 

7. Petitioner's mother was mentally competent at the time she was admitted to the nursing home and 
remained so throughout her stay. She was not a terminal resident but rather envisioned a recuperative 
period followed by a return to independent living. During the time of the events material to this 
matter. Petitioner's mother had not executed a power of attorney to any person. 

8. Petitioner received monthly statements from the nursing home for the cost of her mother's care not 
covered by medicaid or other public program. Petitioner did not pay the monthly bills from the 
nursing home from September, 1992 through May, 1993. 

9. During the period when Petitioner did not pay the monthly bills to the nursing home, she used the 
co-mingled money in the joint checking account for her own financial needs. 

10. On June 22, 1993, the nursing home filed an adult protective services complaint under the provisions 
of Chapter 108A, Article 6 of the General Statutes with the Craven County Department of Social 
Services because Petitioner had not paid for her mother's care at the nursing home for a number of 
months. 

11. On June 23, 1993, Petitioner paid the nursing home bill in full from the proceeds of a settlement with 
a fire insurance company regarding a home Petitioner lost to fire. 

12. The adult protective services complaint regarding Petitioner's mother was investigated by Pitt County 
Department of Social Services since Petitioner was an employee of Craven County. Pitt County 
eventually issued a finding of substantiation as to the charge that Petitioner had exploited her mother 
by not paying the excess part of her expenses at the nursing home. Respondent did not rely on this 
substantiation in its decision to terminate the employment of Petitioner. Respondent used only 
summary notes from Pitt County's investigation to corroborate Respondent's own fectual 
investigation. 

13. Based on having received this adult protective services complaint against Petitioner, Respondent 
conducted a review of Petitioner's client files to determine whether any discrepancies existed. None 
were found. 

14. On June 25, 1993, Respondent's Director, Nancy Coston, convened a meeting with Petitioner and 
a second-level supervisor to discuss the allegations made by the adult protective services complaint 
filed by the nursing home. During this conference. Petitioner admitted that she had been careless and 
had not paid the nursing home bills on time. She indicated to Director Coston that she had been 
experiencing personal financial problems and had used money in the joint account to pay obligations 
other than the nursing home bills. Petitioner further stated that it was not good judgment to have 
done this but that her mother had not been harmed, even though she was unaware that Petitioner had 



9:9 NORTH CAROLINA REGISTER August 1, 1994 656 



CONTESTED CASE DECISIONS 



not kept current with the nursing home bills. Petitioner agreed that the matter would be substantiated 
as an adult protective services complaint and would be referred to the district attom^'s office for 
investigation. 

15. Respondent assumed that Petitioner's mother was an elderly, disabled person who, because of 
Medicaid eligibility and need for some level of institutionalized nursing care, also was vulnerable. 
Respondent did not conduct an investigation to determine whether Petitioner's mother was actually 
disabled or vulnerable or mentally or physically incompetent or incapacitated. 

16. Respondent assumed that Petitioner's mother status in the nursing home was jeopardized or potentially 
jeopardized because of the tardiness of the payments made by Petitioner in June, 1993 for the months 
of September, 1992 through June, 1993. There is no evidence in this contested case that Petitioner's 
mother was threatened with eviction or placed under any other jeopardy as to her status at the nursing 
home as a result of the untimely payment of her monthly bills to the nursing home. 

17. Petitioner was given written notice on July 7, 1993 of a pre-dismissal conference scheduled for July 
8, 1993 to discuss her p)ersonal conduct and whether her employment should be terminated. 

18. At the pre-dismissal conference on July 8, 1993, Respondent provided Petitioner with a letter setting 
forth the factual allegations concerning Petitioner's conduct regarding the adult protective services 
complaint about her nonpayment of bills for her mother's care. Petitioner was given an opportunity 
to respond to each of the factual allegations. 

19. After the pre-dismissal conference. Director Coston concluded, from all of the information before her, 
that Petitioner's failure to timely pay her mother's nursing home bills from a bank account held jointly 
by Petitioner and her mother constituted unacceptable personal conduct. Director Coston concluded 
that this personal conduct by Petitioner demonstrated a threat of harm to clients within the 
department, given the relationship between Petitioner's outside conduct and the nature of her client- 
related work within the department. 

20. On July 15, 1993, Petitioner was dismissed from employment with Respondent because of her 
personal conduct in the handling of her mother's financial affairs with the nursing home from 
September, 1992 through June 23, 1993. 

21. In its dismissal letter of July 15, 1993, Respondent provides the following reason for terminating 
Petitioner's employment: 

Based on my investigation and your admissions to me at conferences 
on June 25, 1993, July 8, 1993, and your letter of June 28, 1993, I have 
concluded that you WILLFULLY AND KNOWINGLY EXPLOITED A 
DISABLED ELDERLY PERSON, (emphasis added). These acts, 
committed outside of duty hours are incompatible with public service and 
are therefore violations of the personal conduct expected of a social worker 
employed at this agency. Your actions were particularly egregious when 
considered in relation to your current job responsibilities and the mission of 
the Craven County Department of Social Services. Such actions not only 
harm the disabled elderly person, but also adversely impact on the 
credibility of this agency. 

For these reasons, I have decided to terminate your employment as 
a Social Worker II with the Craven County Department of Social Services 
effective July 15, 1993. 



657 9:9 NORTH CAROUNA REGISTER August 1, 1994 



CONTESTED CASE DECISIONS 



22. Article 6 of Chapter 108 A of the General Statutes of North Carolina is entitled Protection of the 
Abused, Neglected, or Exploited Disabled Adult Act. In the definitions section, G.S. 108A-101 
(Cum. Supp. 1993), the following is provided, in pertinent part: 

(d) [t]he words "disabled adult" shall mean any person 18 years of 
age or over or any lawfully emancipated minor who is present in the State 
of North Carolina and who is physically or mentally incapacitated due to 
mental retardation, cerebral palsy, epilepsy or autism; organic brain damage 
caused by advanced age or other physical degeneration in connection 
therewith; or due to conditions incurred at any age which are the result of 
accident, organic brain damage, mental or physical illness, or continued 
consumption or absorption of substances. 



(j) [t]he word "exploitation" means the illegal or improper use of 
a disabled adult or his resources for another's profit or advantage. 

CONCLUSIONS OF LAW 

Based upon the foregoing findings of feet, I make the following conclusions of law. 

1 . The parties are properly before the Office of Administrative Hearings. 

2. Petitioner was a career State employee as that term is used in Chapter 126 of the General Statutes of 
North Carolina at the time of her dismissal from the Craven County Department of Social Services 
on July 15, 1993. Petitioner was a local government employee subject to, and afforded the 
protections of, the State Personnel Act, G.S. Chapter 126, at the time of her dismissal. 

3. Respondent has not shown by a preponderance of the evidence in this contested case hearing that 
Petitioner's conduct amounted to exploitation of a disabled elderly jjerson as that phrase is used in 
Article 6 of Chapter 108A of the General Statutes. Although Respondent has attempted to distance 
itself from the statutory definitions of "disabled elderly person" and "exploitation," it cited the exact 
phrase in its letters of charges and allegations to Petitioner as well as its July 15, 1993 letter of 
dismissal. These charges and allegations were brought against Petitioner under the umbrella of a 
Chapter 108A, Article 6 adult protective services complaint alleging that Petitioner had exploited a 
disabled elderly person. Respondent's attempt now to show that its dismissal of Petitioner was based 
solely upon its determination of Petitioner's conduct and in no way in reliance on whether her conduct 
fits the statutory prohibitions is unavailing. 

4. Respondent has foiled to carry its burden of demonstrating just cause for Petitioner's dismissal from 
the Craven County Department of Social Services on July 15, 1993 for unacceptable personal 
conduct. 

RECOMMENDED DECISION 

Based upon the foregoing findings of feet and conclusions of law, it is hereby recommended that 
Respondent's decision to terminate the employment of Petitioner Nettie Jane Godwin (Lawhom) on July 15, 
1993 for inappropriate personal conduct be reversed for lack of just cause. It is recommended that Petitioner 
be reinstated to the position she held on July 15, 1993; that she receive back pay from that date; that she 
receive reasonable attorney's fees and costs; and she receive all other benefits to which she would have 
become entitled but for her involuntary separation on July 15, 1993. 



9:9 NORTH CAROLINA REGISTER August I, 1994 658 



CONTESTED CASE DECISIONS 



ORDER 

It is hereby ordered that the agency serve a copy of the final decision on the Office of Administrative 
Hearings, P.O. Drawer 27447, Raleigh, N.C. 2761 1-7447, in accordance with North Carolina General Statute 
150B-36(b). 

NOTICE 

The State Personnel Commission will issue an advisory opinion to the Director of the Craven County 
Department of Social Services. G.S. 150B-23(a). The agency that will make the final decision in this 
contested case is the Director of the Craven County Department of Social Services. 

The agency making the final decision in this contested case is required to give each party an 
opportunity to file exceptions to this recommended decision and to present written arguments to those in the 
agency who will make the final decision. G.S. 150B-36(a). 

The agency is required by G.S. 150B-36(b) to serve a copy of the final decision on all parties and to 
furnish a copy to the parties' attorney of record and to the Office of Administrative Hearings. 

This the 18th day of July, 1994. 



Beecher R. Gray 
Administrative Law Judge 



659 9:9 NORTH CAROUNA REGISTER August 1, 1994 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA 
COUNTY OF WASHEVGTON 



IN THE OmCE OF 

ADMINISTRATIVE HEARINGS 

94EHR0035 



JAMES GOODMAN 
Petitioner, 



N.C DEPARTMENT OF ENVIRONMENT, 
HEALTH, AND NATURAL RESOURCES, 
DIVISION OF MARINE FISHERIES 
Respondent. 



RECOMMENDED DEaSION 



This matter was heard before Dolores O. Nesnow administrative law judge, on June 22, 1994 in 
Williamston, North Carolina. 

APPEARANCES 

Petitioner: James Goodman, appearing eeo se 

Respondent: Jay L. Osborne, Esq. 

Assistant Attorney General 
Amy R. Gillespie, Esq. 
Associate Attorney General 

ISSUE 

Whether Resp)ondent's recommendation of denial of Petitioner's application for a pound net set in 
Albemarle Sound is proper. 

FINDINGS OF FACT 

The parties received notice of hearing at least fifteen (15) days prior to the date of the hearing. 



1. 



2. G.S. § 113-182 authorizes the Division of Marine Fisheries (hereinafter "DMF") to license, regulate 
or prohibit all forms of marine and estuarine resources in coastal fishing waters. This includes the time, place 
or maimer of any methods or equipment that may be employed in taking fish. 

3. Petitioner is a commercial fisherman. Petitioner applied for a pound net permit to be located 
approximately one fourth of a mile east of Sandy Point Beach in Albemarle Sound on August 28, 1993. 

4. In accordance with N.C. Marine Fisheries Rule 15A NCAC 3J .0107, DMF gave public notice of 
Petitioner's proprosed pound net set on September 24, 1993. 

Letters of objection to the proposed site were received by DMF on October 12 and October 13, 1993. 

6. A public meeting was held by Dr. William T. Hogarth, the Director of DMF, in accordance with 15A 

NCAC 3J .0107(b)(1) on December 2, 1993, to discuss this proposed pound net location. 



9:9 



NORTH CAROLINA REGISTER 



August 1, 1994 



660 



CONTESTED CASE DECISIONS 



7. Concerns were raised at said meeting, inter alia, as to safety problems that could arise due to the 
proposed site of Petitioner's pound net. 

8. After considering the relevant evidence and consulting with his staff, Dr. Hogarth approved 
Petitioner's application under 15A NCAC 3J .0107(b)(1) on the condition that the proposed pound net be 
moved at least 300 yards east of the present proposed site. 

9. When Petitioner failed to place a net in the conditionally approved location, the conditional approval 
became a denial. 

10. Petitioner properly filed a Petition for a Contested Case on January 12, 1994. His grounds for the 
petition were that he was deprived of property and that DMF acted erroneously. 

11. On June 22, 1994 an administrative hearing was held. Both sides presented evidence, and 14 exhibits 
were received into evidence. 

12. No evidence was presented at the contested case hearing supporting Petitioner's allegation that Dr. 
Hogarth's decision was improperly influenced. 

1 3 . The principal objection to Petitioner's proposed site is that it would create safety problems due to the 
water sport activities that take place during the camping season in the same area as Petitioner's proposed 
pound net. 

14. 15A NCAC 3J .0107(b)(1)(C) reads, in pertinent part: 

The Fisheries Director may deny [a] permit application if it is determined that granting the 
permit will unduly interfere with existing, traditional uses of the area .... 

15. Sandy Point Beach Campground has been in existence since 1955. It is a family campground with 
approximately 45 sites. Boating, water skiing and swimming have been, and continue to be, primary activities 
at this campground. These activities take place in the same area as the petitioner's proposed pound net. 

CONCLUSIONS OF LAW 

Based upon the foregoing findings of fact, I make the following conclusions of law. 

1. The parties are properly before the Office of Administrative Hearings, each party had at least 15 days 
notice of the hearing, and notice of the hearing was in all ways proper. 

2. The water sports and recreation occurring near Sandy Point Beach are "existing, traditional uses of 
the area" under 15A NCAC 3J .0107(b)(1)(C). 

3. Petitioner's proposed pound net would conflict with the recreational uses of the area and create a 
safety hazard. 

4. Dr. Hogarth was not improperly influenced by any of his employees. 

5. Dr. Hogarth did not act erroneously, arbitrarily, or capriciously in determining that Petitioner's 
proposed pound net site would conflict with an existing and traditional use. 

6. The Division of Marine Fisheries' decision is upheld. 



661 9:9 NORTH CAROUNA REGISTER August 1, 1994 



CONTESTED CASE DECISIONS 



RECOMMENDED DECISION 

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby recommended that 
the Marine Fisheries Commission affirm the recommendation of the Respondent North Carolina Division of 
Marine Fisheries and deny Petitioner's application for the proposed pound net set. 

ORDER 

It is hereby ordered that the agency serve a copy of the final decision on the Office of Administrative 
Hearings, P.O. Drawer 27447, Raleigh, N.C. 27611-7447, in accordance with North Carolina General Statute 
§ 150B-36(b). 

NOTICE 

The agency making the final decision in this contested case is required to give each party an 
opportunity to file exceptions to this recommended decision and to present written arguments to those in the 
agency who will make the final decision. G.S. § 150B-36(a). 

The agency is required by G.S. § 150B-36(b) to serve a copy of the final decision on all parties and 
to furnish a copy to the parties' attorney of record and to the Office of Administrative Hearings . 

The agency that will make the final decision in this contested case is the North Carolina Marine 
Fisheries Commission. 

This the 18th day of July, 1994. 



Dolores O. Nesnow 
Administrative Law Judge 



9:9 NORTH CAROLINA REGISTER August 1, 1994 662 





NORTH CAROLINA ADMINISTRATIVE CODE CLASSIFICATION SYSTEM 




Ihe North Carolina Administrative Code (NCAC) has four major subdivisions of rules. Two 


of these, 


titles and chapters, are mandatory. The major subdivision of the NCAC is the title. Each major 1 


department in the North Carolina executive branch of government has been assigned a title number. 1 


Titles are further broken down into chapters which shall be numerical in order. The other two, | 


subchapters and sections are optional subdivisions to be used by agencies when appropriate. 




TITLE/MAJOR DIVISIONS OF THE NORTH CAROLINA ADMINISTRATIVE CODE 1 


TITLE DEPARTMENT LICENSING BOARDS 


CHAFIUi 


1 


Administration 


Acupuncture 


1 


2 


Agriculture 


Architecture 


2 


3 


Auditor 


Auctioneere 


4 


4 


Commerce 


Barber Examiners 


6 


5 


Correction 


Certified Public Accountant Examiners 


8 


6 


Council of State 


Chiropractic Examiners 


10 


7 


Cultural Resources 


General Contractors 


12 


8 


Elections 


Cosmetic Art Examiners 


14 


9 


Governor 


Dental Examinere 


16 


10 


Human Resources 


Dietetics/Nutrition 


17 


11 


Insurance 


Electrical Contractors 


18 


12 


Justice 


Electrolysis 


19 


13 


Labor 


Foresters 


20 


14A 


Crime Control & Public Safety 


Geologists 


21 


15A 


Environment, Health, and Natural 


Hearing Aid Dealers and Fitters 


22 




Resources 


I ^ndscape Architects 


26 


16 


Public Education 


Landscape Contractors 


28 


17 


Revenue 


Marital and Family Therapy 


31 


18 


Secretary of State 


Medical Examiners 


32 


19A 


Transportation 


Midwifery Joint Committee 


33 


20 


Treasurer 


Mortuary Science 


34 


*21 


Occupational Licensing Boards 


Nursing 


36 


22 


Administrative Procedures 


Nursing Home Administrators 


37 


23 


Community Colleges 


Occupational Therapists 


38 


24 


Independent Agencies 


Opticians 


40 


25 


State Personnel 


Optometry 


42 


26 


Administrative Hearings 


Osteopathic Examination & Reg. (Repealed) 


44 






Pharmacy 


46 






Physical Therapy Examiners 


48 






Plumbing, Heating & Fire Sprinkler Contractors 


50 






Podiatry Examiners 


52 






Professional Counselors 


53 






Practicmg Psychologists 


54 






Professional Engineers & I and Surveyors 


56 






Real Estate Appraisal Board 


57 






Real Estate Commission 


58 






Refrigeration Examiners 


60 






Sanitarian Examiners 


62 






Social Work Certification 


63 






Speech & Language Pathologists & Audiologists 


64 






Therapeutic Recreation Certification 


65 






Veterinary Medical Board 


66 


Note: Title 21 contains the chapters of the various occupational licensing boards. 


663 9:9 NORTH CAROLINA REGISTER Augiu 


ft I, 1994 



CUMULATIVE INDEX 



CUMULATIVE INDEX 

(April 1994 - March 1995) 

Pages Issue 



1 - 


75 


76 - 


122 


123 - 


226 


227 - 


305 


306 - 


348 


349 - 


411 


412 - 


503 


504 - 


587 


588 - 


666 



1 - April 

2 - April 

3 - May 

4 - May 

5 - June 

6 - June 

7 - July 

8 - July 

9 - August 



Unless otherwise identified, page references in this Index are to proposed rules. 



AGRICULTURE 

Plant Industry, 127 

COMMERCE 

Alcoholic Beverage Control Commission, 423 
Energy Division, 4 

CRIME CONTROL AND PUBLIC SAFETY 

State Highway Patrol, Division of, 243 

ENVIRONMENT, HEALTH, AND NATURAL RESOURCES 

Coastal Management, 443 

DEM/ Air Quality, 80 

Departmental Rules, 254 

Environmental Management, 81, 258, 352, 616 

Health Services, 323, 370, 445 

Mining Commission, 442 

NPDES Permit, 3, 232 

Solid Waste Management, 171, 364 

Water Resources, 165, 255 

Wildlife Resources Commission, 38, 42, 84, 358 

Wildlife Resources Commission Proclamation, 125 

FINAL DECISION LETTERS 

Voting Rights Act, 2, 312, 506, 594 

GOVERNOR/LT. GOVERNOR 

Executive Orders, 1, 123, 227, 306, 349, 412, 504, 588 

HUMAN RESOURCES 

Child Day Care Commission, 10 

Children's Services, 136 

Day Care Rules, 148 

Facility Services, 4, 128, 423, 509 



9:9 NORTH CAROLINA REGISTER August 1, 1994 664 



CUMULATIVE INDEX 



Medical Assistance, 318, 440, 513, 597 

Mental Health, Developmental Disabilities and Substance Abuse Services, 13, 24, 36, 313, 430 

Social Services, 136, 595 

Vocational Rehabilitation Services, 434 

INDEPENDENT AGENCIES 

State Health Plan Purchasing Alliance Board, 99 

INSURANCE 

Life and Health Division, 525 
Medical Database Commission, 605 
Multiple Employer Welfare Arrangements, 76 
Special Services Division, 76 

JUSTICE 

Alarm Systems Licensing Board, 351, 614 

Criminal Justice Education and Training Standards Commission, 149 

State Bureau of Investigation, 234, 530 

LABOR 

Mine and Quarry Division, 239 
OSHA, 77, 160 
Variance, 230 

LICENSING BOARDS 

Acupuncture Licensing Board, 44 

Barber Examiners, 563 

Chiropractic Examiners, 376 

Cosmetic Art Examiners, 280 

Landscape Architects, Board of, 95 

Medical Examiners, 192, 565 

Nursing, Board of, 45 

Optometry, Board of Examiners, 194 

Physical Therapy Examiners, 566 

Plumbing, Heating and Fire Sprinkler Contractors, Board of, 96 

Practicing Psychologists, Board of, 97 

Professional Counselors, Board of Licensed, 50 

LIST OF RULES CODIFIED 

List of Rules Codified, 53, 196, 281, 378, 635 

PUBLIC EDUCATION 

Elementary and Secondary Education, 375, 540 

SECRETARY OF STATE 

Securities Division, 476, 616 

STATE PERSONNEL 

Office of State Personnel, 477 

TAX REVIEW BOARD 

Orders of Tax Review, 415 



665 9:9 NORTH CAROUNA REGISTER August 1, 1994 



CUMULATIVE INDEX 



TRANSPORTATION 

Highways, Division of, 85 

Motor Vehicles, Division of, 89, 276, 542 



9:9 NORTH CAROLINA REGISTER August 1, 1994 666 



NORTH CAROLINA ADMINISTRATIVE CODE 



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